How does the state health insurance system work?
Currently, the country’s health insurance is based on a number of medical aid organizations, such as Discovery, Bonitas and Momentum, and the Government Employees Medical Scheme (GEMS). It is estimated that South Africa currently has around 80 different medical aid schemes. Of these, 21 are open schemes (anyone can join) and 59 are restricted schemes (for companies, specific sectors or industries). The top 15 schemes currently cover 84% of the South African population who are insured – but in practice, that only means about 15% of the population overall.
South Africa’s new public health insurance scheme, National Health Insurance or NHI, aims ultimately to replace these myriad schemes and to provide universal coverage for all residents, regardless of their socio-economic status, that is free at the point of delivery. Its goal is to improve access to healthcare for the country’s poorest residents, based on the South African principle of ‘ubuntu,’ or compassion and humanity.
The NHI will fund both public and private healthcare so that patients will be able to access care providers who are closest to them regardless of sector, and aims at reducing the cost of private health insurance. It will be funded through general taxes, a re-allocation of tax credits, and payroll deductions calculated according to income levels.
The South African government plans to use the money to buy healthcare from public and private doctors, specialists, and hospitals that have been registered with the state system. If the contributions do not prove to be sufficient, the government is expected to pay the balance. All healthcare institutions will have to be compliant with a government-set standard, in an attempt to improve the quality of medical units.
Prior to the advent of the NHI, there was little resembling public coverage in South Africa for expat workers, who were obliged to take out private plans.
Under the new scheme, as an expat you will be eligible if you are making contributions into the system. However, note that the scheme is currently in its infancy. It was introduced in the summer of 2019 and is in the initial phase of a three-stage roll-out. Full implementation is planned for 2026 and may face some teething problems: the South African Health Minister has warned that implementation is an ‘ultra-marathon’ not a ‘sprint.’
The NHI will be introduced in three phases under central government control and will include the following steps:
- preparing hospitals to provide specialised services to all citizens
- registration of those who qualify for NHI and distribution of NHI cards (priority will be given to vulnerable groups such as mothers, small children and the elderly)
- a transitional fund will be be set up to buy healthcare services from certified non-specialist public and private providers. “Ideal clinics” will be accredited to provide primary care
- public hospitals will be accredited by the Office of Health Standards Compliance (OHSC). Emergency medical services and the National Health Laboratory Services (NHLS) are to be contracted in.
- private doctors will also be contracted in to provide primary healthcare services, and this will be extended to providers who can address “physical barriers to learning” for school children: for example, audiologists, speech therapists, psychologists and optometrists.
- (final stage) mandatory payroll contributions will be introduced and private sector providers, such as hospitals and specialists, will be contracted to provide services
The full scheme will not be in place for several years.
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Who is eligible for state healthcare?
As an expat, you will be eligible if you have permanent residency or citizenship, but there has been speculation that you will in practice need travel insurance as well in order to access NHI services; the precise nature of the system has not yet been set in stone. Currently, membership of the new scheme is not mandatory and it is not clear yet whether it will be made compulsory in the future. However, in practice, if you are employed in the country, you will be signed up automatically.
According to the terms of the new legislation, the NHI will start to buy in healthcare services for children, women, the elderly and those with disabilities by 2022.
How do you apply to join the state health insurance system?
Everyone who is covered by the NHI will be automatically registered as the roll-out proceeds; a number of patients have been registered already. There is currently no way to self-enroll.
What is covered by the state health insurance system?
At present, the full range of services that will be covered by the NHI remains unclear, although it is expected to include basic primary and secondary treatment. This will be free at the point of delivery, without co-pays. It is anticipated that new top-up schemes (for example, for oncological treatment or orthodontics) will be created to cover any treatment gaps.
It is intended that once the new scheme is fully implemented, private insurance will only cover services not covered by the NHI. This will include treatment for unusual medical conditions and some dental treatment.
Are retirees covered by state medical insurance?
All permanent residents will be covered by the new NHI regardless of age. You may get tax breaks if you are over the age of 65, however, with some private health insurance packages.
Are students covered by state medical insurance?
Students are unlikely to be covered by state medical insurance and will need to take out private cover. Some universities, such as IEE MSA, insist that you take out private health insurance before you enroll, and this must be with a registered health insurance provider in South Africa. You will be asked for proof of coverage before enrolment.
Will your family be covered by your insurance?
Under the new scheme, your dependents will be covered. There are also private insurance packages available which will cover your children, and may cover your spouse for an additional premium.
Is dental treatment covered by state health insurance?
The current intention is that the NHI will cover basic dental treatment, but not more advanced dentistry.
What are the contribution rates for state health insurance?
It is uncertain as yet how much contribution rates will be, although there has been a prediction of a 3.5-5% contribution deducted from your salary. The intention is that the new scheme will be funded initially from existing public sector funds and will then be funded from contributions: at present the system is due to change over in 2021.
Average minimum contribution rates are estimated to be around R839 ($57) each, and R505 ($34) per child and will apply to the lowest earners, with an income of R9,000 ($610) per month, and upwards. The average family of four currently pays R6,780.40 ($53) for medical aid but will need to fund an additional R11,202 ($760) per month.
Why buy private health insurance?
As an expat you will be entering a healthcare, and health insurance, system that is currently experiencing a high level of disruption. There has been criticism that a number of the pilot schemes have not worked, and questions have been raised about the cost and ultimate success of the implementation of the new NHI. Both doctors and dentists have raised concerns about the scheme.
South African financial advisers have been recommending private packages as a result. This level of uncertainty regarding healthcare in South Africa may cause problems with your access to public healthcare services, and many expats are choosing to take out private health cover for the interim period during which the NHI is being implemented.
In addition, some expats have reported that they have taken out local health insurance but cover has suddenly been cancelled when they have contacted their insurer for pre-approval for treatment. Many expats therefore opt for international coverage with the main providers.
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What is covered by private health insurance?
Private cover currently extends to a wide range of primary and secondary treatments, elective treatments, and advanced dental surgery. Healthcare facilities in the private sector in South Africa are of a very high standard.
How much does private health insurance cost?
Premiums will depend on factors such as your age and any pre-existing conditions, and the kind of package you opt for; a more expensive insurance package will give you more a extensive range of treatment and facilities. As so many variables have an effect on the cost of international private medical insurance in South Africa, it becomes very difficult to give accurate estimates without knowing the full details of the coverage required. However, as a very rough guide, using a standard profile of a 40-year-old British male with no deductibles, no co-insurance, a middle-tier plan, all modules included and worldwide coverage excluding the US, a ballpark price of around £4,000/$5,000 might be expected. Were coverage to be expanded to include the US then the premium could increase to almost double that amount.
Which companies offer private health insurance?
The main international insurance providers cover South Africa, including:
- Allianz Care
- Cigna Global
- Pacific Prime
Glossary of health insurance terms
National Health Insurance (NHI) - the new South African national insurance scheme