Originally published: 09 March 2026
Reading time: 5 mins
Contents
The South African government’s National Health Insurance (NHI) scheme was signed into law in May 2024, with the aim for universal healthcare coverage for the entire country’s population. However, since it was passed, it has faced multiple legal challenges, funding uncertainties, and implementation delays as of February 2026. Recently, as per the advice of the Health minister, Aaron Motshwaledi, President Ramaphosa paused full implementation pending Constitutional Court rulings on key cases scheduled for May 2026. Similarly and relatedly, the Solidarity Fund received a favourable court ruling on February 24 for the government to halt the Act’s implementation momentarily.
This article explains all the dynamics of the NHI as is; its purpose, the legal arguments, the funding mechanisms, and the tic-tac-toes happening between the private sector and the government.
Purpose of NHI
Its purpose can best be described by looking at what would be the difference in an NHI era, versus what’s currently happening. Once implemented, the changes will affect the clinical, administrative, and financial conduct of hospitals, doctors, and medical schemes.
Healthcare practitioners, particularly those in the private sector, will go from being independent service providers to state-accredited functionaries within the NHI framework. The Act requires all practitioners to register as NHI users and providers to be accredited by the Fund.
How services are charged for will also change. The current fee-for-service model in the private sector is expected to be replaced by a model in which providers receive a fixed fee per patient rather than per individual service. This is intended to remove the incentive to overservice, including over-testing and over-treatment. Medical schemes will be prohibited from covering any service that is already paid for by the NHI Fund. Schemes will only be permitted to offer top-up cover for services not included in the NHI benefit package.⁸
Last but not least, citizens will be required to contribute to the NHI through mandatory prepayments, regardless of whether they choose to retain separate medical scheme cover.
Opposition
The whole concept of the NHI was questioned by, among others, the Board of Healthcare Funders, Solidarity trade union, South African Medical Association (SAMA), Hospital Association of South Africa (HASA), AfriForum, Sakeliga, and the Western Cape Provincial Government.
Feasibility of the current medical infrastructure
A key argument is the feasibility of the current medical infrastructure. At its implementation, public hospitals and clinics would have to expand to handle most services. In doing so, private hospitals might supplement public capacity, but will be facing reduced funding from medical schemes, which would only be covering non-NHI services. The argument is that the integration of the private sector into the NHI pool will result in unsustainable workload increases. A private surgeon currently working at 158% of normal capacity would be required to work at 368% capacity to meet NHI demand, potentially for a significantly lower income⁶.
Financially infeasible
Estimates for fully running NHI vary widely due to an unclear scope and no official government figure. Some analysts project R900 billion to R1.3 trillion annually, exceeding current public-private healthcare spending of around R500 billion and potentially consuming 25% of GDP. Critics like Momentum Health called this mathematical hooliganism, while the Health Minister dismissed the high estimates as fearmongering.
Tax-related financing needs prerequisites
Whatever the case may be, a fund still needs to be established and the money has to come from somewhere. The Act specifies potential tax sources to fund the scheme, such as a surcharge on personal income tax and payroll taxes.³ However, such changes to any tax laws in South Africa requires the passage of specific legislation, i.e., the Rates and Monetary Amounts and Amendment of Revenue Laws Bill, by both the National Assembly and the National Council of Provinces.¹¹ These have not yet been introduced by National Treasury, which needs to supply the directive and motivation¹².
HASA argues that the government failed to adequately cost the scheme and that there is no feasible way to finance it in the current economic climate. The Solidarity fund’s court award on 24 February 2026 was intended to stop the government from pushing NHI funding into the 2026/27 budget, held on 25 February 2026, and they were successful.
Clininal independence
Because of the fixed fee per patient structure, treatments will have to be standardised and boxed into a budget. The complexity of this will vary from your regular flues to chronic disease management. However, SAMA’s filing identifies nine conflicting definitions of the listed NHI benefits within the Act itself, making it impossible for patients to know what services they are entitled to. There are concerns that the mandatory use of treatment protocols and formularies determined by the NHI Fund will limit the clinical independence of doctors, potentially affecting their ability to prescribe treatments based solely on individual patient needs.⁴
Improper public participation process followed
The Board of Healthcare Funders (BHF) and The Western Cape Provincial Government argue about the public participation process. South Africa’s Constitution (s59, s72) mandates meaningful public involvement in law-making, typically via advertising, submissions, and hearings in Parliament/NCOP (National Council of Provinces). Challengers claim NCOP’s process was inadequate (e.g., Western Cape views ignored, submissions dismissed), rendering the Act invalid. ConCourt is prioritising this for the May 2026 hearing.
Conclusion
The Minister of Health has stated that he does not expect medical schemes to be materially affected by the Section 33 restrictions for at least the next 10 to 15 years, given the time required to build the state’s purchasing capacity.¹⁰ But he has stated that the implementation will go on, if no court orders to stop are available. This means businesses in the healthcare space will have to be proactively finding ways to not be obsolete in the 10 to 15 years.
