The case against the National Health Insurance (NHI) Act by one of the major players in the private healthcare landscape, the Board of Healthcare Funders (BHF), got under way in the High Court in Pretoria on Tuesday, 4 March.
The BHF represents more than 40 medical schemes and administrators covering 4.5 million beneficiaries.
It is not the only organisation that is challenging the NHI Act. Applications have been filed by the South African Private Practitioners Forum, trade union Solidarity, and, most recently, by the Hospital Association of South Africa (HASA).The BHF has questioned the process and legality of President Cyril Ramaphosa’s decision to sign the NHI Bill into law. The BHF wants to see the president’s record of decision, which it believes will disclose whether he adequately considered constitutional concerns raised by stakeholders before giving his assent. The BHF argues this review is essential to determine whether the president fulfilled his constitutional duties.
HASA’s primary aim is to have the NHI Act set aside in its entirety, arguing it is incoherent, financially unviable, and unconstitutional on multiple grounds.
BHF’s procedural concerns
The BHF questions whether Ramaphosa diligently and rationally assessed the NHI Bill’s constitutionality, as required by the Constitution. It argues that under section 79(1), the president must refer any concerns about a Bill’s constitutionality back to the National Assembly for reconsideration.
In its court papers, the BHF contends that Ramaphosa may have ignored dissenting views from stakeholders, including government departments such as National Treasury, which advised that the bill was unconstitutional. The BHF asserts the matter should have been returned to Parliament for further deliberation rather than being signed into law.
To substantiate this claim, the BHF has requested the president’s full records, expecting them to show what submissions he received, how he handled them, and why he proceeded despite warnings of unconstitutionality.
Constitutional concerns
The BHF’s main challenge highlights specific constitutional flaws in the NHI Act, notably its potential to infringe on provincial authority. National Treasury, in a 2018 letter included in the BHF’s court filings, warned that health is a provincial competency under the Constitution, and the NHI’s centralisation of healthcare usurps these powers, rendering it unconstitutional. This argument forms a key part of the BHF’s case, reinforcing its call for the president’s records to determine whether he considered such concerns before signing the Bill.
A significant point of contention is the appropriate court to hear the case.
Ramaphosa and Health Minister Dr Aaron Motsoaledi argue that only the Constitutional Court has jurisdiction, citing section 167(4)(e) of the Constitution, which grants the apex court exclusive authority to decide whether the president or Parliament has failed to fulfil a constitutional obligation. They assert that the president’s assent and signature are not reviewable by the High Court.
The BHF counters that the High Court has jurisdiction to review the legality and rationality of the president’s decision-making process under section 79(1). The BHF says its challenge focuses on the president’s actions, not the NHI Act’s constitutionality, making the High Court the proper venue.
The BHF views the government’s jurisdictional objection as a delaying tactic, noting that Ramaphosa has refused to provide his record of decision, which they believe would expose his disregard for submissions highlighting the Bill’s flaws.
HASA attacks the lack of costing
HASA represents major private hospital groups, such as Netcare, Life Healthcare, and Mediclinic. It filed legal papers in the High Court in Pretoria at the end of January.
A central argument in HASA’s case is that NHI is financially unworkable, and the government has failed to adequately cost the scheme before its implementation. HASA challenges Motsoaledi’s assertion that NHI does not need to be costed before it is rolled out. According to HASA, this position contradicts guidance from the World Health Organization, which advises that governments should conduct cost estimates, albeit not protracted ones, before embarking on major healthcare reforms.
HASA’s founding affidavit, submitted by chief executive Dumisani Bomela, states that although the WHO does not advocate for single-figure cost projections that could delay reforms, it does recommend estimating ranges of costs based on various assumptions.
To bolster its argument, HASA submitted a report by Greg Harman, an executive director at the Berkeley Research Group, which concluded that there is “no feasible way” to finance NHI given South Africa’s current fiscal challenges.
Harman’s report aligns with concerns raised by National Treasury, stating that the government lacks the capacity to raise taxes, introduce new levies, reprioritise the national budget, or borrow additional funds to finance a comprehensive universal healthcare system.
Furthermore, HASA highlights that the government has not conducted any recent financial feasibility studies to assess the likely cost of implementing NHI. This, they argue, raises the risk of a significant funding shortfall, which could disrupt healthcare access for millions of South Africans.
Alleged constitutional violations
HASA’s challenge also rests on several constitutional grounds, arguing that the NHI Act infringes on key provisions of the Constitution.
HASA contends that NHI’s proposed overhaul of the healthcare system is likely to disrupt access to healthcare, particularly because of its financial infeasibility. HASA argues this violates section 27 of the Constitution, which guarantees every citizen the right to access health services.
The association claims the NHI Act is prohibitively vague and grants the Minister of Health excessive, unchecked power without sufficient guidance. HASA argues this constitutes an unlawful delegation of authority, making the Act unconstitutional. HASA asserts that NHI’s centralisation of healthcare funding at the national level usurps the constitutional powers of provincial governments to manage and roll out their own healthcare services.
The NHI Act excludes the scheme from the provisions of the Competition Act, allowing it to operate as a quasi-monopolistic purchaser of healthcare services. HASA argues this violates section 217 of the Constitution, which mandates fair, transparent, and competitive procurement processes.
HASA also challenges the NHI’s funding mechanisms, particularly the proposed introduction of new taxes (such as a payroll tax or additional income tax) without recent financial feasibility studies. HASA argues this unlawfully binds the Minister of Finance’s discretion in passing Money Bills.
HASA claims the NHI Act unlawfully discriminates against asylum seekers by treating them differently from refugees, thereby infringing on their constitutional rights.
Despite launching the legal challenge, HASA has emphasised that it sought to avoid litigation and remains open to constructive dialogue with the government. The association stated it was compelled to take legal action because of the government’s failure to respond to alternative proposals.
HASA’s chairperson, Melanie da Costa, reiterated the organisation’s commitment to participating constructively while the legal process unfolds, saying that “effective healthcare solutions are urgently needed and achievable through a reasonable and collaborative approach”.
