HOW ‘TRANSPARENT’ WILL THE NHI BILL’S PARLIAMENTARY PROCESS BE?

This article appeared in the 30 August edition of Legalbrief Today, under Policy Watch

An opinion document on the constitutionality of the National Health Insurance (NHI) Bill presented orally to members of the National Assembly’s Health Committee before a briefing from Health Minister Zweli Mkhize was withheld from journalists – despite reportedly having been made available for copying and public circulation well before the meeting. Prepared by the Office of the State Law Adviser and read verbatim to the committee by acting head Ayesha Johaar in the presence of media representatives and health sector stakeholders, the document was only distributed to committee members after lunch, by which time Johaar had left. Her presence at the meeting was apparently requested at surprisingly short notice. When the morning session ended and committee chair Sibongiseni Dhlomo was approached for permission to make copies available to members of the public, he declined – claiming not to have seen or read the document.

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Why Dhlomo adopted this stance is not clear. Underpinned by provisions in sections 27 and 146(2) of the Constitution, as well as sections 3 and 25 of the 2003 National Health Act, Johaar’s opinion is that the Bill is ‘constitutionally sound’. Section 27(1)(a) of the Constitution makes access to health care services a universal right. Section 146(2) spells out the conditions in which national legislation uniformly applicable ‘to the country as a whole’ prevails over provincial legislation. Section 3 of the Act deals with the responsibilities of the Minister, the national department, provincial departments and local authorities in providing healthcare services. Section 25 sets out the general functions of provincial departments in that context.

A committee media statement issued two days before the briefing – refuting allegations that the Bill had been ‘suspended’ because of concerns about its constitutionality – also noted that, having met ‘one of the state law advisers’ to discuss the matter, Dhlomo was ‘comfortable’ with the advice he received. Johaar is the adviser to whom he was referring. However, widely publicised reservations by some stakeholders about government’s capacity to fund NHI, manage it financially and deliver quality services – not to mention speculation about the future role of medical schemes – may explain Dhlomo’s obvious distrust of media representatives. This is especially given the extent to which some journalists tend to sensationalise issues without scrutinising the documents on which they report. The indignant tone of DA Evelyn Wilson’s input during the meeting probably did little to smooth already ruffled feathers. She has much to learn from party colleagues Siviwe Gwarube and Haseena Ismail, whose equally candid approach was noticeably more deferential.

Against that backdrop, the Minister, his deputy Joe Phaahla, Health Department DG Precious Matsoso, deputy DG Anban Pillay, presidential adviser Olive Shisana, NHI office head Nicholas Crisp and other departmental officials fielded an avalanche of questions about the Bill and NHI in general from the DA, FF Plus MP Philippus van Staden and the EFF’s Naledi Chirwa – but did little to assuage their fears. Neither the model to be used in implementing NHI nor the mix of options available to fund it are cast in stone. However, conceding that government ‘will need to invest strongly’ in improving the standard of public healthcare services and facilities, Mkhize said that, where there is evidence of ‘neglect’ it ‘must be corrected’. ‘We are at such a low level of quality that we will have to fight hard to improve it,’ he told the committee, referring to NHI as a ‘vision’ and an opportunity to ‘up the game’. According to Pillay, the need for ‘robust’ monitoring and evaluation was simply confirmed by the pilot phase.

In the Deputy Minister’s view, while NHI promises to be a ‘disruptive intervention’ – especially for the 15% of citizens able to afford private healthcare – ‘fear of the unknown’ cannot be allowed to prevent government from moving forward with plans to honour not only its constitutional obligations but also binding international commitments. While Phaahla did not elaborate on the role of medical schemes under the NHI system and little was said on the issue, Pillay confirmed that it will be spelled out in regulations. References by Shisana to presidential health compact partnerships and by Crisp to the introduction of NHI as ‘a journey, not an event’ were vague – tending to point to a long road ahead, albeit with ample opportunities for public consultation. Funding proposals will be the focus of a separate draft money Bill.

THE 2019 NATIONAL CREDIT AMENDMENT ACT, UNPACKED

This article is based on one that appeared in the 20 August edition of Legalbrief Today, under Policy Watch

The controversial, recently gazetted 2019 National Credit Amendment Act – paving the way for the introduction of long-term debt intervention measures for qualifying consumers but not yet in force – has sparked outrage in some quarters, mainly because of provisions perceived to constitute the deprivation of property (Business Day). However, according to an opinion sought from Advocate Wim Trengrove by former members of the National Assembly’s Trade & Industry Committee, while the Act does indeed allow for this, the provisions in question do not amount to the arbitrary deprivation of property and are therefore ‘permissible and lawful under section 25(1) of the Constitution’. The version of the Bill on which Trengrove’s opinion was sought was later revised to address other issues he raised at the time.

Once operational, the new piece of legislation will provide not only for the ‘suspension or part-suspension of a credit agreement’ and ‘an alteration or extension of that suspension’, but also for ‘the extinguishing of the whole or a portion of the total of the amounts contemplated … under a qualifying agreement’. This is according to the committee report that accompanied the Bill to the House for a second reading. The term ‘debt intervention applicant’ will refer to anyone whom – at the time of applying – either receives no income at all (or whose monthly income during the preceding six months was less than R7500) and whose total unsecured debt does not exceed R50 000. When deemed appropriate, the Minister concerned will have the power to review and adjust these caps.

In addition, once in effect the new statute will require debt counsellors to report to the National Credit Regulator ‘any suspected reckless credit agreements’ identified when an over-indebted consumer applies for debt review; empower Magistrates’ Courts to lower the rate of interest, fees or other charges under credit agreements as a debt rearrangement measure; and enable the introduction of regulations for ‘targeted credit life insurance for all unsecured credit’, capped ‘lower than … existing insurance’. New enforcement measures will make it a criminal offence to intentionally misrepresent information when applying for debt intervention; engage in prohibited conduct in respect of credit agreements; and not to register as a credit provider, credit bureau, debt counsellor, payment distribution agency or alternative dispute resolution agent. Both the National Credit Regulator and National Consumer Tribunal ‘will require additional capacity’ to process the number of debt intervention applications likely to be made once these measures are in force. With that in mind, now that the Act has been gazetted, the necessary plans and related funding requirements can be finalised.

NHI BILL CONFIRMS LIMITS TO ‘UNIVERSAL’ QUALITY CARE

This article is is based on two that appeared in the 12 and 15 August editions of Legalbrief Today, under Policy Watch

Once in force, the National Health Insurance Bill tabled last week in Parliament is expected to facilitate universal access to ‘needed health care that is of sufficient quality to be effective’ – and ‘financial protection’ from its costs. This is according to a memorandum on the Bill’s objects. However, in expanding on this, clauses 4, 5 and 7 of the Bill (respectively dealing with population coverage, user registration and health care services coverage) point to distinct limitations. Together, sub-clauses 4(4), 5(1) and 7(2)(e) make it very clear that only public and private health care facilities accredited over time by the fund will be available to registered fund users. Registration will not be compulsory. In addition, sub-clause 7(2)(e) requires the fund to ‘enter into contracts with accredited health care service providers and health establishments at primary health care and hospital level based on the health needs of users and in accordance with referral pathways’. This tends to suggest that private health care practitioners and facilities will be able to choose whether to contract in or out of the NHI system – at least at this stage of the process.

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Regarding the role of medical schemes, clause 33 implies that – in the context of sub-clauses 4(4), 5(1) and 7(2)(e) – ‘once NHI has been fully implemented’ registered fund users who are also members of medical schemes will only be eligible for ‘complementary cover’ for ‘services not reimbursable by the fund’. Furthermore, sub-clause 39(1) clearly states that health care service providers and health establishments accredited by the fund will be required to deliver ‘services at the appropriate level of care to users who are in need and entitled to health care service benefits that have been purchased by the fund on their behalf’. This is noting that, according to sub-clause 57(1)(b), NHI ‘must be gradually phased in using a progressive and programmatic approach based on financial resource availability’.

According to the memorandum on the Bill’s objects, ‘in a favourable economic environment’, ‘new taxation options’ for the fund will be considered. In this regard, the Bill’s clause 49(2) refers to the ‘reallocation of funding for medical scheme tax credits’, ‘employer and employee’ payroll tax and a ‘surcharge on personal income tax’. An assumption on the part of some commentators that all listed options will automatically be factored into the mix could well be misplaced. Writing for Moneyweb, Bowmans tax partner Aneria Bouwer appears to agree. Like the 2015 NHI White Paper, the Bill tends to suggest that specific elements of the combined revenue source are still up for discussion. Meanwhile, the fund will depend on ‘some’ conditional grants being shifted from the Department of Health – as well as ‘some or all’ monies for ‘personal health care services’ traditionally factored into the provincial equitable share formula (clause 49). In this regard, reference is made to moving the national tertiary services grant and the HIV/AIDS and TB grant from the Department of Health into the fund. In appropriating money from the fiscus, Parliament will be guided by the principle of ‘social solidarity’ – which is defined as ‘financial risk pooling to enable cross-subsidisation between … young and … old, rich and … poor, … healthy and sick’.

National Assembly Health Committee chair Sibongiseni Dhlomo has confirmed that work on the Bill will begin with a briefing on its constitutionality from the Office of the State Law Adviser. This is expected to allay concerns expressed by DA leader Mmusi Maimane. The parliamentary process will include public hearings to be conducted separately by the National Assembly, the NCOP and the provincial legislatures.

NEW BILL CONFIRMS NHI VULNERABILITY

This article was published on the Legalbrief website on 8 August, when the Bill was tabled in Parliament. It was not included in that morning ’s edition of Legalbrief Today, which was posted before the Bill became available. A more detailed breakdown of the Bill ’s key provisions will follow next week.

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The National Health Insurance (NHI) Bill tabled in Parliament today seeks to provide South Africans with ‘access to needed health care that is of sufficient quality to be effective’, as well as ‘financial protection’ from its costs. According to a memorandum on the Bill’s objects, this is the aim of universal health coverage – as spelled out in the 2015 NHI White Paper. To that end, the Bill provides for the establishment of an NHI fund, setting out its powers, functions and governance structures.

The Bill proposes that – using ‘some’ conditional grants shifted from the Department of Health to the fund as well as ‘some or all’ monies for ‘personal health care services’ traditionally factored into the provincial equitable share formula – the fund will purchase health care services for all registered users. Reference is made specifically to moving the national tertiary services grant and the HIV/AIDS and TB grant from the Department of Health into the fund.

In addition, the fund’s executive authority ‘will bid for funds through the main budget as part of the budget process’. This is noting that, ‘in a favourable economic environment’, ‘new taxation options for the fund’ will be considered and could include either ‘a surcharge on income tax’ or ‘a small payroll tax’. Against that backdrop, it is envisaged that, over time, the fund will ‘expand coverage using certified and accredited public and private sector health facilities’.

In this regard, the memorandum refers to implementing ‘reforms’ in six phases, the first of which is apparently already a work in progress. Its focus is to improve ‘the quality of the health system by … certifying … health facilities to ensure (that) they meet the requirements of the Office of Health Standards Compliance’. The final phase will focus on expanding coverage to accommodate ‘maximum projected utilisation rates’ – and ‘gradually increasing the range of services to which there is a benefit entitlement’.

While the memorandum notes ‘legitimate’ concerns about ‘the affordability and sustainability of NHI’, it offers the assurance that ‘the nature of the proposed system’ and ‘the checks and balances that will be put in place’ will ‘limit unnecessary expenditure increases for supply-side as well as demand-side management’. The success or failure of NHI will be determined largely by the extent to which ‘high quality primary health care services’ ensure that ‘the majority of health problems’ are ‘diagnosed and treated at this level’.

‘RUSHED’ APPROPRIATION BILL A CONCERN

This article appeared in the 2 August edition of Legalbrief Today, under Policy Watch

Neither Finance Minister Tito Mboweni nor his deputy, David Masondo, was present when the National Council of Provinces (NCOP) considered and passed the 2019 Appropriation Bill on Wednesday (Fin24) – tending to suggest that the final leg of its passage through Parliament was merely a formality. While NCOP member and former National Assembly Finance Standing Committee chair Yunus Carrim ‘stopped short’ of saying as much (SABC News), by drawing attention to the Minister’s absence from the House when it voted on the ‘important’ Bill, he might just as well have done so. Without Mboweni or his deputy, there could be no debate before the vote took place (Business Day).

Approved by the National Assembly on 23 July, the Bill’s ‘B’ version reflects the R17.7bn allocation to Eskom in April, which Finance Minister Tito Mboweni requested be factored into the version tabled on 20 February but not processed by the time Parliament rose for May’s elections. Having been revived on 3 July, it was subjected to public hearings just under two weeks later at a joint meeting of the NCOP and National Assembly Finance Committees. According to Parliamentary Monitoring Group records, Carrim used the opportunity to remind members that, despite capacity constraints, they have a ‘huge responsibility’ to ensure that the funds appropriated are ‘used productively’. Yet after the hearings, each committee met only once – to adopt the Bill.

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A perception in some circles that it was ‘rushed through Parliament’ is therefore hardly surprising. In the view of DA leader in the NCOP, Cathy Labuschagne, not only has neither House ever made ‘significant amendments’ to an Appropriation Bill; the ‘right to debate’ its contents is being gradually eroded (Business Day). This despite provisions in the 2009 Money Bills Amendment Procedure and Related Matters Act apparently requiring what her colleague, Dennis Ryder, described as ‘thorough interrogation’ during deliberations in both committees (Fin24). Given the ‘austere measures’ imposed by the 2019 Appropriations Bill, Ryder believes the three-week process fell far short of these requirements.