Lizette Groenewald CFP®, Head: MCA Healthcare Consulting at Momentum Corporate
At the end of October, the Department of Health told Parliament that NHI-specific implementation will not go ahead until the Constitutional Court rules on the legal challenges against the National Health Insurance (NHI) Act. Whatever the outcome, full implementation is likely to take years.
For many large employers, that removes the last reason to keep waiting. Many people are treating NHI as a reason to put off redesigning their healthcare benefits, given that the entire system might change.
Meanwhile, the cost of healthcare continues to rise. The Council for Medical Schemes asked schemes to anchor their 2027 contribution increases at 3.8%, yet many of the larger schemes have announced average increases of between about 7% and 9%, roughly double that guideline. Those increases take effect in January.
The message for executive committees is simple: uncertainty around NHI should not result in decision paralysis. I understand why many employers have adopted a wait-and-see approach. Policy certainty would make long-term planning easier. But healthcare inflation continues regardless of policy timelines.
The cost of waiting
While businesses wait, they keep carrying the risk of benefit structures that may no longer be efficient. Costs rise. Affordability declines for employees. And opportunities to redesign benefits proactively, rather than in a crisis, are lost. There is a cost to inaction.
With increases this high, employers should review how their healthcare benefits are structured, not just how much they cost. That starts with subsidy structures. Are employer contributions designed in a way that helps employees join and stay on appropriate cover? It also means looking at the options offered. In some cases, complementary products, such as health insurance that provides out-of-hospital benefits, can be a good starting point for widening access to care.
The focus needs to shift away from simply absorbing annual increases and towards overall benefit design and value: helping employees access the care they need, in a way the business can sustain.
One budget, not separate line items
Healthcare benefits cannot be assessed in isolation. When medical aid costs rise significantly, other parts of the employee value proposition come under pressure, including retirement funding, risk benefits, salary increase budgets, and wellness and employee support programmes.
Every rand allocated to healthcare is a rand that is unavailable elsewhere. If healthcare decisions are made in one silo and retirement or risk decisions in another, employers can unintentionally weaken the very benefits that protect their people over the long term. Healthcare, retirement and risk benefits should be reviewed together, as part of a single total reward strategy, not as separate line items.
Practical options for lower-paid employees
Affordability remains one of the biggest barriers to healthcare access for many lower-paid employees, who often cannot afford traditional medical scheme membership under today’s system. There are practical, affordable solutions. Depending on the workforce, these can include health insurance and primary healthcare products where appropriate. Employers can also consider sponsored clinics and wellness programmes that provide meaningful benefits to employees.
The key is finding solutions that balance cost with access. An informed healthcare adviser can help employers assess the options and choose those that are most appropriate, cost-effective and suited to their workforce’s needs.
The question for the executive committee
If I were advising an executive committee today, I would put one item on the agenda: a review of the organisation’s healthcare strategy within its broader employee value proposition. The question should not be: “What are we doing about NHI?” but rather, “Are our healthcare benefits sustainable, affordable, and aligned with our workforce’s needs over the next three to five years?”
NHI may one day shape the future direction of healthcare policy in South Africa. But it does not change the realities that businesses face today. Healthcare costs are rising now. Affordability challenges are growing now. And employers need to make strategic benefit decisions now.
The organisations that act early will be better positioned to protect both their people and their benefit budgets. Waiting for policy certainty that may be years away is itself a decision, and potentially a costly one.
ENDS
