National Health Insurance (NHI)) Bill: Parliamentary Legal Services & State Law Advisors input
15 March 2023
Chairperson: Dr K Jacobs (ANC)
Documents:
Doj&CD: NHI Responses to Legal Issues Raised
Meeting Summary
NHI: Tracking the Bill through Parliament
Parliamentary legal advisor comments on NHI Bill (awaited presentation)
The Portfolio Committee held a virtual meeting with parliamentary legal advisers to discuss the overarching concerns surrounding the National Health Insurance (NHI) Bill, which involved the Bill’s constitutionality.
Members were told the NHI bill was government’s first piece of enabling legislation for its plan for universal health coverage in South Africa. The broad idea behind the NHI Bill was to implement healthcare reform by bringing both private and public healthcare under state control for the purpose of achieving quality universal health coverage, as opposed to the current system of healthcare driven by parallel systems of healthcare, resulting in unequal levels of quality.
In the meeting, the parliamentary legal advisers gave a detailed breakdown of the ways in which several sections in the Bill potentially presented a constitutional challenge. These sections included:
- Section 4(2): Excludes asylum seekers and undocumented foreigners from healthcare service coverage.
- Section 3(5): Demonstrates the vague composition of the Bill. This section leaves it to the discretion of the NHI Fund to decide on a case-by-case basis what "health care services for the purpose of the bill" means.
- Sections 12 and 13: The bill vests too much power in the Minister of Health, as these were powers exclusively exercised by the President.
- Section 3(5): Replaces competitive bargaining between healthcare providers with a system of price regulation by the Fund through blanket exemptions against the Competition Act in the Bill, reducing the number of stakeholders to whom the rules of the Competition Act apply.
- Section 33: Restricting the function of medical aid schemes to being simply a provider of complementary cover.
The Office of the State Legal Adviser held a different opinion regarding the constitutionality of the Bill. After careful consideration of the provisions of the Bill to ensure that it was aligned with the provisions of the Constitution, with case law and other relevant legislation, they were satisfied that its provisions did not infringe any of the fundamental rights entrenched in the Bill of rights unlawfully. They concluded that there was in fact a rational connection between the proposed legislation and the scheme which it seeks to adopt, and the achievement of a legitimate government purpose, which is to establish the Fund to achieve sustainable and affordable universal access to quality healthcare services. Ultimately, they were satisfied that Parliament, in passing the proposed legislation, would not be acting capriciously and arbitrarily in violation of the rule of law, thereby rendering such legislation inconsistent with the Constitution.
The Chairperson advised the Members of the Committee that they would be provided with an opportunity to submit their input concerning the legal opinions presented once all the presentations had been concluded next week.
Meeting report
Opening Remarks
The Chairperson asked the Committee Members to introduce themselves to the new Members, Mr S Dlamini (ANC) and Dr J Nothnagel (ANC), who had just joined the Committee.
He told the Committee that they would hear the presentations of the legal advisers, and thereafter they would deliberate on the advisers’ legal response to the Bill the following week.
The State Law Advisers would be asked to prepare a list to be presented to the Committee for discussion. Once they had come to an agreement, they would ask the advisers to prepare the B Bill. Once the B Bill had been prepared, it would be brought back to the Committee for further discussion as to whether they would accept the B Bill, or reject it with reasons. Eventually, the Bill would be adopted if there was consensus to do so among the Members, and the Bill would be sent to the National Assembly for debate.
Briefing by Parliamentary and Constitutional Legal Services
Ms Sueanne Isaac, Parliamentary Legal Adviser, presented on the contentious clauses of the Bill that could potentially amount to a constitutional challenge. She presented on the following:
- The Competition Act
- Access to healthcare for everyone, including asylum seekers
- The role of provinces
- Medical schemes
- Governance of the Fund
- Funding model
Areas that received a lot of comment
- Competition Act
The Competition Act seeks to prevent and prosecute anti-competitive behaviour, and allows the Competition Commission to investigate such behaviour. The wording of clause 3(5) in the National Health Insurance (NHI) bill is broad, in that it excludes all transactions concluded in terms of the NHI bill from the application of the Competition Act. This exclusion will apply not only to the NHI Fund, but also to all parties who contract with the NHI Fund. This includes service providers and suppliers. The exclusion will not be in keeping with the constitutional requirement of section 217 of the Constitution to ensure fair, equitable, transparent, competitive and cost-effective procurement. The clause should be amended to apply only to the NHI Fund, and not to suppliers and any other service provider.
- Access to Healthcare
In terms of the NHI Bill, an asylum seeker will no longer enjoy access to primary healthcare services, reproductive healthcare, and antiretroviral therapy. Section 27(2) of the Constitution places a duty on the state to take reasonable legislative action and other measures within the available resources to achieve progressive realisation of each of these rights for everyone.
The NHI Bill will deprive asylum seekers of existing constitutional entitlements to access to healthcare. This will amount to a retrogressive measure that will mean that the state will be impairing existing rights, which cannot be done without compelling justification for imposing these measures. The courts have held that a person cannot be deprived of existing access without it being justified in terms of section 36 of the Constitution. The Department of Health (DoH) has not provided any justification for why asylum seekers will no longer be entitled to the healthcare access they currently enjoy.
- Medical Schemes
Clause 33 of the Bill provides for the role of medical schemes. The Bill does not provide much detail on how medical aid schemes will operate once the NHI bill is enacted. It is also unclear how current medical aid users will access healthcare services during the phased-in implementation of the NHI. This creates legal uncertainty. The NHI is funded by a mandatory pre-payment. It is unclear if medical scheme users will be required to make the mandatory pre-payment whilst still paying their medical scheme contribution while the NHI is not fully implemented.
The role of medical schemes will be fundamentally altered once NHI is implemented. Medical schemes in future will offer only complementary cover for services not reimbursed by the Fund. This violates access to healthcare. The Constitution requires the state to take reasonable legislative and other measures within its available resources to achieve the progressive realisation of rights, including in respect of access to healthcare. If medical scheme users suffer a reduction in access to healthcare services as a result of the full implementation of the NHI, this will give rise to a Constitutional challenge based on the violation of section 27(1) of the Constitution, which is a right to access healthcare.
- The Governance of the Fund
The Bill vests too much power in the Minister of Health. By making the Board accountable to the Minister of Health (section 12) and giving the Minister powers to appoint and remove members of the Board or dissolve the entire Board (section 13), the proposed governance structure concentrates power on the Minister. As a result, there is a lack of separation between the political and operational spheres, weakening the role of the Board, and failing to ensure its independence and accountability.
- The Funding Model
The Bill does not provide sufficient detail on how the funds will be raised. Increased taxation is either unaffordable or unsustainable, and the Bill is unclear on how funding will flow to providers.
Briefing by Office of the Chief State Law Adviser (OCSLA)
The Portfolio Committee requested the State Legal Advisers to respond to all the legal issues that various Members had raised during the deliberations on the Bill.
Ms Ayesha Johaar, Deputy Chief State Law Adviser, OCSLA, presented on the following:
- The NHI Bill as an international obligation by the state
- The rationality of the Bill
- Co-operative government
- Asylum seekers
- Governance of the Fund
- Competition Act
- Accreditation of healthcare service providers and establishments
Areas that received a lot of comment:
The country’s international obligation to implement NHI
International law also finds application in respect of the Bill. The Republic, as a state party to a number of international legal instruments, is bound by the obligations that it took upon itself. The binding nature of these international agreements, in accordance with section 231(2) of the Constitution, means that the country has a duty to comply with these provisions and to domesticate these obligations into our law. As a state party to various international instruments, the country is implementing a legislative measure by introducing the NHI bill in Parliament to give effect to its international obligation of providing healthcare services, and in furtherance of section 27 of the Constitution.
The rationality of NHI
The exercise of all legislative power is subject to two constitutional constraints. Firstly, there must be a rational connection between the legislation and achieving a legitimate government purpose. Secondly, the legislation must not infringe upon any of the fundamental rights entrenched in the Bill of Rights. However, South Africa's courts had confirmed that rights contained in the Bill of Rights may be limited by a law of general application, in accordance with section 36 of the Constitution. Such a limitation must be justifiable in terms of 36(1) of the Constitution. The onus of establishing the absence of a legitimate governmental purpose or a rational relationship between the law and the purpose falls on the objector.
The provisions of the Bill are rationally connected to the objective of providing sustainable and affordable universal access to quality healthcare services for all in the country. The combined Constitutional obligations of section 27 of the Constitution and the binding international obligations which must be given effect to, are key to motivating the rationality of the Bill.
Asylum seekers
The Bill limits the right of access to healthcare for an asylum seeker and undocumented foreigners. In terms of clause 4(2) of the Bill, these categories of persons are entitled only to emergency medical services and services for notifiable conditions of public health concern. The limitation of the rights of foreign individuals to the extent provided for in the Bill, based on references made to available resources in section 27(2) of the Constitution, meets the requirements of the limitation test provided for in section 36, and is constitutionally sound.
Discussion
The Chairperson announced that the Members of the Portfolio Committee would be provided with an opportunity to submit their input concerning the legal opinions presented once all the presentations had been concluded, which would be the following week.
Closing Remarks
The Chairperson thanked the Members and the two legal teams for the wonderful work that they had done to provide the Committee with a legal opinion. It was up to the Members to engage further on the responses received from the legal teams next week. He reminded them that the next meeting would be in-person, and encouraged the Committee to book their flights in time.
The meeting was adjourned.