The Health Funders Association (HFA) has described the National Health Insurance (NHI) Act as fiscally impossible and has tabled a hybrid funding model that will enable private healthcare providers to provide services in tandem with the NHI.

The HFA, accounting for 46% of the private healthcare market and representing 21 medical schemes and three administrators, this week became the latest entity to legally challenge the NHI for undermining the right of medical aid members to choose how to access health services.

HFA commissioned an independent study released this week which found the NHI required substantial tax far beyond South Africa's fiscal capacity.

“What’s more, the proposed model offers no guarantee of improved outcomes, while restricting the mechanisms that currently drive quality and innovation in health care,” said the FHA.

Commenting on the report, HFA CEO Thoneshan Naidoo said South Africa needs a healthcare system that delivers equitable, quality care for all.

“However, in its current form, and without private sector collaboration, the NHI Act is fiscally impossible and operationally unworkable, and threatens the stability of the economy and health system affecting everyone in South Africa,” he said.

Naidoo said the NHI Act centralises control of all healthcare financing in a single, state-run fund, removing the ability of medical schemes to offer cover for healthcare services reimbursable by the NHI.

“We continue to advocate for a more inclusive, hybrid funding model that incorporates medical schemes in NHI. We believe such a model would expand access to care while protecting the rights of all South Africans,” said Naidoo.

The NHI, which introduces universal health coverage, has been challenged in court by Solidarity, the Board of Healthcare Funders, the South African Private Practitioners Forum, the Hospital Association of South Africa and the South African Medical Association.

Foster Mohale, the health spokesperson, on Friday confirmed the department had received court papers.

“This is case number six. We have an evolving court process and we'll allow that process to take its course,” said Mohale.

FHA commissioned a report by Genesis Analytics, which showed that personal income tax will need to increase from the current average rate of 21% to an average of 46% of income, pushing marginal tax rates in the lowest income bracket from 18% to 41%, and in the highest bracket from 45% to 68%.

The Genesis model also considered a scenario of pooling existing healthcare expenditure, citing that personal income tax would need to increase from its average of 21% to 31%. At the same time, medical scheme members would face a 43% reduction in the level of healthcare services relative to what they currently received.

“In simple terms, the equation for medical scheme members therefore becomes ‘Pay 1.5 times more tax for 43% less healthcare’. Such tax increases are fiscally impossible, particularly given South Africa’s narrow personal income tax base of 7.4-million tax payers,” said the FHA.

TimesLIVE