Advantages And Disadvantages Of National Health Insurance

An elderly man can now afford to see a doctor at hospital thanks to national health insurance to cover the cost of essential and emergency medical services.

Worldwide debates around the benefits and challenges of universal health coverage have become increasingly central over the last few decades. And just a couple of years ago, the debate became a local one after the South African government proposed the National Health Insurance (NHI) Bill. The intention behind this financing system is to ensure that all South African citizens (and legal long-term residents) have equal access to the same level of healthcare. However, all good intentions aside, is a National Health Insurance system a realistic option for South Africa? And can it meet the standards already set by leading health insurance providers operating in the private sector?

Advantages of National Health Insurance

  • Lower overall health care costs. The government would control the prices of medical care through negotiation and regulation. And since doctors would deal only with a single government agency, there would potentially be a decrease in administrative costs.
  • Remove health-related barriers to education. Children with undiagnosed and untreated health issues may not get the full benefits of education. Ideally, the NHI should create improved access to testing and health care solutions that could address barriers to learning.
  • Promote equality. Access to health care should be determined by an individual’s need, rather than their ability to pay the exorbitant medical fees. With lower overall health costs and standardised services, every citizen can have access to the same level of care.
  • Stimulate the economy. If the NHI can provide for preventative care, South Africa may find itself with a healthier workforce. Greater preventative care would also reduce the need for emergency room visits, which would in turn reduce the cost of medical care.
  • Improve social security. Better access to health care can prevent future social issues like crime and welfare dependency. Meanwhile, the NHI may also help to support vulnerable groups like the elderly or women living in poverty, who have fallen through the cracks of the current inequitable health system.

Disadvantages of National Health Insurance

  • Healthy people pay for the sickest. US studies found that chronic diseases make up 90% of healthcare costs. According to these studies, the sickest 5% of the population create 50% of total healthcare costs, while the healthiest 50% only create 3%.
  • Less financial incentive to stay healthy. Without co-payments, the general concern is that people might overuse emergency rooms and doctors.
  • Long wait times. Patients may face long wait periods for elective procedures as government funds would be focused on providing basic and emergency healthcare.
  • Decreased quality of care. If they aren’t financed well-enough by cost-cutting governments, doctors may cut back on care to lower costs.
  • Potential for corruption. Public confidence in the state’s capacity to run large institutions is at a record low. Growing evidence of public sector corruption does nothing to breed such confidence. This is no more clearly illustrated than the financial crises gripping state-owned entities like Eskom and SAA. The new NHI bill does nothing to assuage these fears.

When will NHI be implemented? Hard to say. The government has proposed to implement the National Health Insurance Bill within the next five years – or seven, tops. However, behind closed doors, officials are saying reform could take decades.

In the meantime, make sure you are financially secure, should you or a loved one end up in hospital. With a reliable health insurance provider, you can afford the care you need over the course of a hospital stay. Get a quote today to get some certainty in uncertain times.

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