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Dear Fellow South African,

Last week I signed the National Health Insurance Act in to law, bringing our country one step closer towards universal health coverage. This is a milestone in our quest to achieve the Sustainable Development Goal of good health and well-being for all.

For many years, we have had parallel healthcare systems operating in our country. The majority of the population, some 84%, uses public health facilities, while 16% are covered by medical schemes, enabling them to access private health care facilities. A small percentage of people use both.

This has perpetuated inequality, with the quality of health care one receives being determined by one’s ability to pay. This runs contrary to our aspiration to be a society that is just and equal.

While achieving social justice is a key objective of National Health Insurance (NHI), efficiency and better resource allocation are equally important. We have said that the real challenge in implementing NHI lies not in the lack of funds but in the misallocation of resources that currently favour the private health sector at the expense of public health needs.

There is a misconception that the private health care sector operates and is funded completely independently of government.

Firstly, the training of doctors, nurses and other healthcare personnel that work in both the public and private sectors is subsidised by the state. Secondly, as an employer, the state pays billions of rands annually in subsidies for employees who are members of the various public sector medical aid schemes. Thirdly, taxpayers claim tax rebates for medical aid expenses amounting to approximately R37 billion. This is the money the state should earn in taxes which it foregoes to subsidise private health care.

We therefore have a situation where the state both directly and indirectly helps to fund a private health care sector that serves only a minority of society.

Access to private health care through medical aids is also costly for users. It is said that without the tax rebate private healthcare would not be affordable to the majority of users. Medical aid contributions are increasing faster than inflation. At the same time, benefits are being reduced. As the 2016 Healthcare Market Inquiry found, private healthcare services and medical scheme cover is frequently over-used without clear improvements in health outcomes.

The resources that are spent both by the state and private individuals can therefore be more efficiently used to build a single, unitary health care system that serves all.

Some people have claimed that the NHI will signal the end of private health care. To the contrary, the NHI aims to use the respective strengths and capabilities of both the private and public health sectors to build a single, quality health system for all.

South Africa’s private health sector has world-class expertise and is a major source of domestic and foreign investment. The public sector too has numerous centres of excellence and is staffed by well-trained, experienced personnel.

The NHI Fund will procure services from accredited public and private service providers for every person in need of health care.

The NHI will be a lifeline for millions of poor South Africans whose resources will be freed up for other essential needs. It will also alleviate the burden on those who are increasingly paying more in medical aid premiums for increasingly fewer services.

There may be different views on how NHI will be progressively implemented, the reality we must confront is that the current health care system is unsustainable.

Access to quality, decent healthcare should not depend on one’s ability to pay. The current situation does not serve the poor, does not serve the middle-class and does not serve the country.

With careful planning, effective oversight and monitoring, and the strategic allocation of resources we can achieve universal health coverage. Working together in partnership, as both the public and private sectors, we can make the dream of quality health care for all a reality.

With best regards,

Issued by President Cyril Ramaphosa