The Hospital Association of SA (Hasa) has asked the Gauteng High Court (Pretoria) to declare the National Health Insurance Act unconstitutional and unlawful and to set it aside, while experts say the planned throttling of existing private medical insurance use is unprecedented by international standards.
BusinessLIVE reports that Hasa is challenging Health Minister Aaron Motsoaledi’s assertion, made in response to a separate legal challenge brought by Solidarity, that the scheme did not need to be costed before implementation. Respondents are cited as Minister of Health, Minister of Finance and the President.
Solidarity was the first organisation to try to overturn the Act, shortly after it was signed into law by President Cyril Ramaphosa in May 2024, followed by the Board of Healthcare Funders and the SA Private Practitioners Forum.
Last month Hasa said it planned to take legal action because the government had failed to respond to alternatives to NHI suggested by various groups, including Business Unity SA.
Hasa’s members own and operate more than 500 private hospitals, containing three-quarters of the about 40 500 licensed private hospital beds in the country.
In its papers, Hasa challenges the Minister’s assertion in the Solidarity case that NHI does not need to be costed before implementation and that this position is supported by the World Health Organisation (WHO).
‘WHO guidance’
“The Minister’s expert affidavits contend there is little value in trying to understand the total cost of a fully implemented NHI and whether that cost will be affordable. However, this is not in line with the WHO’s guidance,” said Hasa CEO Dumisani Bomela in his founding affidavit.
“In particular the WHO does not say that the government should not conduct any costing studies before embarking on public healthcare reform. The WHO says that the government should conduct cost estimates that provide ranges of costs depending on various assumptions and models … (but they) should not conduct long, protracted costing exercises aimed to reach a single figure that might delay public health reform.”
Hasa argues that the Act is incoherent, financially unviable, and at odds with the Constitution because it will worsen access to healthcare for the general population and curtail services for asylum seekers.
It submitted to the court a report by Berkeley Research Group executive director Greg Harman that concluded there is no feasible way to finance NHI, given South Africa’s fiscal challenges.
“In my assessment, and that of the National Treasury, there is no scope to raise tax rates or to introduce new taxes, to significantly reprioritise the national budget, or for the government to borrow additional funding to finance comprehensive universal healthcare here,” he said.
Harman said inherent financial risks with implementing the NHI Fund would reduce competition and probably reduce hospital returns to unsustainable levels. International experience showed national health programmes could become financially unsustainable “within years of launching”, he said, citing the UK, Ghana, South Korea and Taiwan.
Hasa argued that the Act’s restrictions on medical schemes were irrational and violated section 27 of the Constitution, which places an obligation on the state to progressively expand access to healthcare.
The group’s expert witness, Margaret Guerin-Calvert, founding president of FTI Consulting’s Centre for Healthcare Economics and Policy, said the NHI’s restrictions on the use of existing private medical insurance was virtually unprecedented by international standards. Her review found no examples of this, aside from some provinces in Canada.
In a separate legal suit, the BHF this week argued that the disclosure of President Cyril Ramaphosa’s records to trace his steps in approving the NHI Act could clarify whether he followed all legal requirements before signing the Bill into law.
The BHF, which epresents the interests of more than 40 medical schemes and administrators covering 4.5m beneficiaries in SA, queried, in its High Court submission, whether Ramaphosa e had properly applied his mind before signing the document.
BusinessLIVE reports that in its court papers, the BHF questioned whether the President considered dissenting views or simply ignored these before signing the Bill.
Section 79(1) of the Constitution reads: “The President must refer any concerns about the Bill’s constitutionality to the National Assembly for reconsideration.”
BHF believes the matter should have been further deliberated in Parliament before being signed.
“The BHF and many other industry stakeholders advised the President that the NHI Bill was unconstitutional for multiple reasons and requested he remit the matter back to the National Assembly for reconsideration,” its court papers said.
Ramaphosa’s records would provide evidence on whether or not he considered stakeholders’ views, it added.
“The record is expected to reveal the submissions received by the President (including by government departments), which advised that the Bill was unconstitutional, at least in part. It will show how the President handled these submissions,” the court papers read.
“Crucially, the record should clarify why, despite receiving these submissions, the President still assented to and signed the Bill, explaining his disagreement with the concerns raised.”
The President’s legal team argued it was a constitutional case and should be heard by the apex court and not the High Court.
It pinned its argument on section 167 (4) (e) of the Constitution which stipulates that only the Constitutional Court may “decide that Parliament or the President has failed to fulfil a constitutional obligation”.
The BHF opposed this view saying: “The President’s stance is wrong”, and that the High Court has jurisdiction.
“The Constitutional Court has deemed it unnecessary to define what constitutes a ‘fail(ure) to fulfil a constitutional obligation’ under section 167(4)(e) …as the scope of its exclusive jurisdiction may depend on the specific facts and nature of the challenge.
“The court is called upon to adjudicate the legality and rationality of the President’s decision (whether he took all necessary steps in terms of section 79(1)). The court is not called upon to determine the constitutionality of the NHI Bill.”
BusinessLIVE – Board of Healthcare Funders requests Ramaphosa’s records in NHI court battle
BusinessLIVE article – Private hospitals take legal action against NHI Act (Restricted access)
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Solidarity says NHI legal battle lines drawn
‘Piecemeal’ HMI implementation won't bring down costs, say experts