Thursday, 13 June, 2024
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Medical schemes and union kickstart NHI legal challenges

Two legal suits against the National Health Insurance (NHI) Act were lodged this week amid concern that the scheme will put at least 130 000 healthcare jobs at risk, notes MedicalBrief.

Solidarity and the Board of Healthcare Funders have launched separate legal challenges, while the DA has lodged a complaint with the Public Service Commission.

The Board of Healthcare Funders has asked the High Court to set aside the signing of the Bill, focusing on the President’s powers and responsibilities when he considers whether to sign Bills, reports BusinessLIVE.

“Our goal is to right what we think is wrong in the Act,” BHF MD Katlego Mothudi said.

“Yes, we do want universal health coverage, but we need to make sure it is fit for purpose. Our health system is not in a great position. The Act will not achieve that which is intended (by government).”

The BHF represents 40 medical schemes operating in SA, covering a total of 4.5m beneficiaries, or about half the total medical scheme market.

Its members include the more than 2m GEMS scheme members.


In legal papers filed on Monday, the BHF asked the High Court to review and set aside President Cyril Ramaphosa’s decision to assent to and sign the Bill, and to declare that the Act has no legal force.

It cited the President and Health Minister as respondents, but focused its legal attack on the President, asking for a full record of his decision-making on the Bill. These records are expected to show Ramaphosa received several submissions advising him that the Bill was unconstitutional, and explain the basis on which he disagreed with these submissions and concluded he had no reservations about the document’s constitutionality before signing it, Mothudi said in his founding affidavit.

The Constitution provides the President with only two options after Parliament passes a Bill: he passes it because he is satisfied it meets constitutional requirements, or he refers it back to Parliament for reconsideration if he has reservations about its constitutionality.

The President has no other options: he cannot refuse to sign on policy or political grounds, Mothudi said.

“It should be readily apparent from the record and advice that the President received how (he) reconciled himself with these concerns and (presumably) concluded he held no reservations about the Bill’s constitutionality. If the record does not reflect this to be so, then his assent to the NHI bill was unlawful and in violation of the Constitution,” Mothudi said.

The BHF participated in the public consultation process leading to Parliament’s adoption of the Bill, and petitioned the President to send it back for reconsideration, but its request, like many others, was ignored, he said.

Ramaphosa had not replied to the BHF or provided any reasons to the public explaining why constitutional concerns raised by the BHF were of no concern.

Presidential spokesperson Vincent Magwenya declined to comment, saying the legal team had yet to receive the BHF’s papers.

Work with it

Despite criticism of the Bill, some organisations, including Business for South Africa, have said that instead of immediately going to court, they will work with the government to correct provisions they believe are unworkable.

“None of us has a choice. We need to fix and address defects in the legislation and ensure it is fit for purpose. Currently it is not. The best way … is to engage openly and transparently to ensure we accommodate all perspectives in determining the correct outcome,” said Martin Kingston of Business for South Africa.

Medical schemes, including Momentum and Discovery, said they would also continue to engage with government to establish an NHI offering to benefit SA.L

Labour union Solidarity also filed a legal challenge in the Gauteng High Court (Pretoria) o Friday asking for the law to be declared unconstitutional and invalid, saying failures in the public health system had led to inequality in access to healthcare that the Act would be unable to fix.

In his founding affidavit, Solidarity’s CEO of legal matters Jasper van der Bijl said the “feasibility and sustainability of the scheme … is dependent on a money Bill which is yet to be introduced and passed by Parliament”, reports TimesLIVE.

“All evidence has shown that such a Bill is not feasible and will have disastrous consequences for the economy.”

He also argued that ordinary South Africans’ lack of access to timely and high-quality healthcare interventions had been caused by public health system failures.

“The public and private health systems developed in tandem and, taken together, enable universal access to healthcare. However, the public health system is marred by tolerance of ineptitude; leadership, management and governance failures; and the lack of a fully functional district health system.”

The new law would “necessitate massive reorganisation of the current healthcare system and require material structural change, at significant cost”.

The NHI Act, Van der Bijl added, had been drafted as if it were a policy document, “with proposed implementation over what some say may be decades, just (adding) to the vagueness and uncertainty”.

“Central to the vagueness concern is section 33, which allows for the Health Minister, at his or her discretion, to make a declaration on when the NHI is ‘fully implemented’, by consequence of which medical schemes will then only be allowed to provide ‘complementary’ cover,” he added.

Health Department deputy director-general Nicholas Crisp said the issues raised by Solidarity had already been addressed in Parliament.

Meanwhile, after a large number of public servants belonging to the Government Employees Medical Scheme (GEMS) contacted the DA in distress after the signing of the NHI into law, the party has lodged a complaint with the Public Service Commission, asking it to investigate and propose measures, including the possible repeal or revision of, the Act.

GEMS has more than 2.8m principal members and beneficiaries, reports The South African.

The party said using NHI to expropriate medical aid contributions without compensation and to extort even higher taxes from South Africans, including from the millions of public servants who are members of GEMS, will only serve to “fuel further the ANC corruption and mismanagement that is the real cause limiting access to quality public healthcare for millions of poor citizens”.

DA shadow minister for public service and administration Leon Schreiber said the party’s complaint to the PSC is lodged under the commission’s mandate, as outlined in section 196 (4)(a-c) of the Constitution.

“The foreseeable breakdown in labour relations, and possible widespread labour unrest that will follow the President’s signing of the NHI into law will cripple the ability of the public sector to deliver critical services to people,” said the party.

Service delivery was “already teetering on the brink of collapse, and the breakdown in relations between workers and the employer – triggered by the expropriation without compensation of public servants’ GEMS contributions and unbearable tax increases – would push the situation beyond breaking point”, it added.

And, in a BusinessTech report, health economist and policy analyst Claire Botha noted that the NHI’s restructuring process that could mean provinces losing their health functions and shutting down Health Departments because of a mismatch between the skills required to run the scheme and those working in public service.

Additionally, the Health Department would probably not have the money to accommodate everybody currently employed in administrative positions in the provinces.

This could result in very few public servants being absorbed into the NHI, which could, she said, affect at least 130 000 administrative staff employed across all nine provinces.

And in 2019, at a Business Unity SA (BUSA) meeting, the Hospital Association of SA (HASA) warned of a similar number of jobs at risk in the private sector.

HASA had commissioned economics consultancy Econex to analyse the potential effect of the NHI, and the report provided two scenarios to illustrate the economy-wide effect, with the worst-case estimating a loss of 132 000 jobs across the sector.

HASA told BusinessTech this week that a lot has changed since the report’s commissioning, and it would prefer not to speculate on potential job losses for now.

It said the types of jobs most at risk would depend on what services the NHI would implement through the main fund, and which services would be covered by medical schemes.

“The details will spell this out, and we don’t have those right now,” said HASA.


BusinessTech article – Ramaphosa puts over 130,000 jobs in South Africa at risk (Restricted access)


The South African article – DA lodges complaint with the Public Service Commission over NHI (Open access)


TimesLIVE article – NHI will not achieve universal access to healthcare, says Solidarity in legal challenge (Restricted access)


BusinessLIVE article – Medical schemes target president in fresh legal attack on NHI (Restricted access)


See more from MedicalBrief archives:


Ramaphosa signs NHI Bill, but long road ahead still


NHI funds should not be in state’s hands – Profmed CEO


Government open to more talks and 'collaboration' on NHI





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