1. BACKGROUND 
 
1. General 
 
1.1 Cabinet approved the policy for the transformation of the South African health care system to achieve universal coverage for health services, which includes the creation of a National Health Insurance Fund as a strategy for moving towards Universal Health Coverage (UHC). 
 
1.2 The aim of universal health coverage is to provide South Africans with: 
 
(a) access to needed health care that is of sufficient quality to be effective; and 
 
(b) financial protection from the costs of health care. 
 
1.3 The National Health Insurance Bill, 2019 ("Bill"), seeks to provide for the universal access to health care services in the Republic in accordance with the National Health Insurance White Paper and the Constitution of South Africa, 1996 ("Constitution"). The Bill envisages the establishment of a National Health Insurance Fund ("Fund") and sets out its powers, functions and governance structures. The Fund will purchase health care services for all users who are registered with the Fund. The Bill will also create mechanisms for the equitable, effective and efficient utilisation of the resources of the Fund to meet the health needs of users and preclude or limit undesirable, unethical and unlawful practices in relation to the Fund and its users. 
 
1.4 The Preamble recognises the socio-economic imbalances and inequities of the past, the need to heal the divisions of the past, the need to establish a society based on democratic values, social justice and fundamental human rights and the need to improve the quality of life of all citizens. The Preamble also takes cognisance of Article 12 of the United Nations Covenant on Economic, Social and Cultural Rights, 1966, which provides for the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, and of Article 16 of the African Charter on Human and People's Rights, 1981, which provides for the right to enjoy the best attainable state of physical and mental health. The Preamble also recognises the right to have access to health care services, including reproductive health care as provided in section 27(1)(a) of the Constitution as well as the obligation on the State to take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of the right of access to health care services as provided in section 27(2) of the Constitution. 
 
2. ADDRESSING BARRIERS TO ACCESS 
 
2.1 Structural challenges in the health system 
 
2.1.1 There is a need for reform of both the health care financing and service delivery systems so that all South Africans have access to affordable, quality personal health care services regardless of their socioeconomic status within the context of the burden of disease in South Africa. 
 
2.1.2 The main problem relates to the fragmentation of health care fund pools in the South African health system and the aim is to create an integrated pool in order to achieve universal health coverage for health care services by establishing a purchaser-provider split with the Fund being the single-payer for comprehensive health care services purchased on behalf of users. 
 
2.1.3 The barriers to access that need to be addressed are: 
 
(a) an onerous burden of out-of-pocket payments on some individuals due to the uneven implementation of user fee exemptions at public hospitals and the high cost of care in the private sector; 
 
(b) distance to health facilities remains a major barrier to access, including in terms of the availability and costs of public and emergency transport; 
 
(c) lack of sufficient, qualified staff within the public health sector relative to the size of the population served by this sector; 
 
(d) misdistribution of health care providers between geographic areas, with a concentration in large urban areas; 
 
(e) weak purchasing and incentive mechanisms; 
 
(f) fragmented funding and risk pools, which limit the potential for income and risk cross-subsidies; and 
 
(g) inefficient provider payment mechanisms in both the public and the private health sectors. 
 
2.1.4 In order to achieve the objectives listed below, there must be a reconfiguration of the institutions and organisations involved in the funding, pooling, purchasing and provision of health care services in the South African health system. 
 
2.2. The implementation of reforms in the 2017/18 to 2021/2022 period will take place in six phases: 
 
2.2.1 The intermediate preparatory phase involve improving the quality of the health system by first certifying the health facilities to ensure they meet the requirements of the Office of Health Standards Compliance. 
 
2.2.2 Initiate the establishment of the Fund whilst simultaneously introducing a national quality improvement plan that helps facilities to be certified and accredited to provide health care services to be funded under National Health Insurance ("NHI"). During this phase health facilities that are certified and accredited will start to provide health care services for users of the Fund (September 2019-March 2021) 
 
2.2.3 Fund and its Executive Authority will bid for funds through the main budget as part of the budget process to expand coverage using certified and accredited public and private sector health facilities. This phase will focus on fully establishing the purchaser-provider split and associated reforms, such as changing provider payment mechanisms and the implementation of the Fund's institutional arrangements (May 2020-March 2021). 
 
2.2.4 Shift some of the conditional grants such as the National Tertiary Services grant and the HIV / AIDS and TB grant from the Department of Health into the Fund and continue with step 2.5.3. (April 2021-March 2022). 
 
2.2.5 Shifting some or all of the funds currently in the provincial equitable share formula for personal health care services (currently the main public health funding stream to the Fund to gradually extend these delivery and management reforms to all districts and public hospitals (April 2022). 
 
2.2.6 The final phase will largely relate to expanding coverage in terms of being able to accommodate the maximum projected utilisation rates and gradually increasing the range of services to which there is a benefit entitlement. In a favourable economic environment there will be an initiation of the evaluation of new taxation options for the Fund including evaluating a surcharge on income tax, a small payroll tax or as financing sources for NHI. 
 
2.3 This phased approach will be described in more detail in a series of implementation plans by the Department of Health, and will be updated regularly on the basis of insights gained from piloting some of the activities and careful monitoring of each phase. 
 
2.4 The purpose of the introduction of the reforms mentioned in paragraph 2.2 above is to ensure consistency with the global vision that health care should be seen as a social investment and not be subject to trading as a commodity. The universal health coverage system is a reflection of the kind of society we wish to live in: one based on the values of social solidarity, equity, justice and fairness. 
 
3. AFFORDABILITY AND SUSTAINABILITY 
 
3.1 A legitimate concern is the affordability and sustainability of National Health Insurance in South Africa. This can best be considered with reference to the nature of the proposed system and the checks and balances that will be put in place to limit unnecessary expenditure increases for supply-side as well as demand-side management. 
 
3.2 Affordability and sustainability can be addressed as follows: 
 
3.2.1 Placing increased emphasis on health promotion and preventive services and outlining how this will be achieved (e.g. through the activities of ward health agents); 
 
3.2.2 establishing high quality primary health care services as the foundation of the health system, to ensure that the majority of health problems can be diagnosed and treated at this level; 
 
3.2.3 introducing a mechanism for "gatekeeping" through a primary health care approach and referral system, where patients access higher level services on the basis of referral networks; 
 
3.2.4 a system of priority setting that emphasises health promotion and disease prevention and in which medically necessary interventions are used; and 
 
3.2.5 improving public health facility infrastructure and to strengthen district health management. 
 
4. STRENGTHENING PRIMARY HEALTH CARE ("PHC") SERVICES 
 
4.1 Building a high quality and effective PHC service delivery platform is the foundation upon which the health system will be based. 
 
4.2 The PHC service delivery platform will be located within the District Health Management Offices and services will be delivered in a comprehensive and integrated way. 
 
4.3 There will be an increased emphasis on health promotion and preventive services, in addition to improving curative and rehabilitative services. 
 
4.4 The delivery of primary health care services will be population-orientated with extensive use of community and home-based services in addition to PHC facilities, follows: 
 
4.4.1 PHC outreach teams will be deployed in each municipal ward, supported by a nurse and linked to a PHC facility such as a clinic; 
 
4.4.2 PHC outreach teams will be allocated households that they will visit on a regular basis. They will provide health promotion education, identify those in need of pr

To achieve universal access to quality health care services in the Republic in accordance with section 27 of the Constitution; to establish a National Health Insurance Fund and to set out its powers, functions and governance structures; to provide a framework for the strategic purchasing of health care services by the Fund on behalf of users; to create mechanisms for the equitable, effective and efficient utilisation of the resources of the Fund to meet the health needs of the population; to preclude or limit undesirable, unethical and unlawful practices in relation to the Fund and its users; and to provide for matters connected herewith.