Discovery’s chief executive Adrian Gore has once again sounded the alarm bells against government’s “problematic” National Health Insurance (NHI) scheme, warning it would need exorbitant tax hikes to fund.
Gore said that the implementation of the NHI Act, in its current form, will essentially wreck the South African economy.
He made these comments at the company’s annual Discovery Day event and further emphasised that the scheme was unworkable and unfeasible.
“This is a complex issue. It is an intergenerational process that will take time, but it is a problematic piece of legislation,” Gore said.
“We have been unequivocal as business, as Discovery, and as a sector, that the NHI is unworkable without private sector collaboration,” he said.
“There is just not enough funding available if the NHI is imposed in a draconian form that excludes private medical aids,” Gore added.
Discovery has created a tax list that South Africa would need to implement to fund the roughly R200 billion needed for NHI each year.
According to Discovery, they claim government would need to institute:
- A 31% increase in personal income tax or
- A 6.5% increase in VAT or
- A ten times increase in payroll tax
“That would wreck the economy and does not do enough for anyone. You need more funding,” Gore emphasised.
A flawed piece of legislation
In May, Gore described the NHI Act as “flawed” and that it would take decades to implement the universal healthcare system.
"We see no scenario in which there is sufficient funding for a workable and comprehensive NHI in its current form, hence our conviction that private sector collaboration is vital, and that full implementation of the bill remains a long way off, likely decades," Gore said.
"Significant flaws in the bill and the legislative processes followed in promulgating the bill, will also likely result in the bill being challenged on numerous fronts, leading to further likely delays.“
Not the only detractor
Discovery is not the only detractor of the NHI scheme, big business, including BUSA and BLSA are opposed.
Two weeks ago, Business Unity South Africa called for an “urgent amendment“ to the NHI Act, as it was unacceptable in its current form.
The organisation said it was disappointed that despite commitments by the government to engage in the NHI Act, structured discussions had not yet taken place.
Busa CEO Cas Coovadia said the organisation was deeply concerned about the inappropriate rhetoric directed at those who have raised legitimate concerns regarding the NHI Act, in its current form.
“Raising these concerns is not only appropriate but in fact, the responsible and necessary course of action to ensure that the path that we choose as a country is both viable and sustainable,” he added.
“We have also been extremely clear in our position that the NHI, as is envisioned in the Act, is unaffordable, unimplementable and unconstitutional, and therefore requires urgent amendment,” Coovadia explained.
As a result of these issues and concerns, President Cyril Ramaphosa met with Busa this week.
The president has requested that Busa submit specific proposals on the remaining issues of concern as a basis for further engagement.
“Government remains committed to engaging with all stakeholders in good faith on the process of healthcare reform, and to finding workable solutions that will advance quality and affordable healthcare for all,” the Presidency said of their meeting with Busa.
Discovery hikes prices as it discredits the NHI
It goes without saying that the NHI Act will be a major challenge to Discovery’s financial stronghold on the medical aid sector.
And in light of Gore’s criticism, Discovery earlier this week, announced that it will be increasing contributions for 2025 by a weighted average increase of 9.3%.
In a statement, Discovery said the increases in contributions will range from 7.4% to 10.9%, depending on the plan.
Around half of Discovery Health Medical Scheme members will experience a contribution increase of 8.4% or less.
The increases in Discovery Health Medical Scheme gross contributions for 2025 across benefit plans are:
| Keycare Start | 7.4% |
| KeyCare Core | 7.4% |
| KeyCare Plus | 9.9% |
| Smart | 7.4% |
| Core | 9.9% |
| Saver | 8.4% |
| Coastal (Core/Saver) Plans | 10.9% |
| Priority | 9.9% |
| Comprehensive | 10.9% |
| Executive | 10.9% |
According to Discovery, the contribution increases and benefit updates for 2025 have been submitted to the Council for Medical Schemes for their approval.
IOL BUSINESS