South Africa’s National Health Insurance (NHI) promises free healthcare for all, but the system could take many years to implement, with legal battles and funding problems standing in the way.

In the meantime, South Africans are being urged to maintain their medical aid cover and even gap cover to protect against high medical costs.

That is the message from Tiago de Carvalho, CEO of Ambledown Financial Services, who said South Africans face an increasingly complex and costly medical landscape.

The NHI Act was signed into law in May 2024, setting up a single national fund that would buy healthcare services for the country.

The aim is to provide care that is free when people need it, after they have registered with the system. But nothing has been put into effect yet.

“This means the Act exists on paper but remains inactive—a legal framework waiting for an implementation command that may be years away,” de Carvalho explained.

Instead, the NHI has moved to the courts. Medical schemes, private doctors, and professional groups have challenged the law, arguing it restricts rights such as freedom of association, the right to work, and the right to access healthcare.

They also argue that the government has not explained how the NHI will be funded or how it will reimburse providers.

In 2024, the Gauteng High Court even struck down legislation that would have controlled where doctors could practice, which experts said could be a sign of how the courts will deal with the NHI. An appeal on this matter was heard in September 2025.

Even if the legal issues are resolved, the rollout is likely to be slow. The plan was for the NHI to be phased in between 2024 and 2028, but key structures are not ready.

“Among the challenges in the first phase are the fact that no clear funding mechanisms have been finalised, contracting units for primary healthcare are not yet in place, and provider accreditation processes remain undefined,” said de Carvalho.

NHI unlikely to replace private healthcare

Estimates for the annual cost of the NHI range between R300 billion and R460 billion. This comes at a time when South Africa already has debt levels above 75% of GDP, slow economic growth, and a shrinking tax base.

“Even the most modest phase of implementation requires financial discipline and growth— neither of which currently characterises the South African economy. If the first step is unfunded, the rest of the plan becomes meaningless,” de Carvalho warned.

Because of these problems, de Carvalho said it is unlikely that the NHI will replace private healthcare. Instead, South Africa will probably end up with a hybrid system where the NHI exists alongside medical aids and other insurance products.

“Even with successful NHI implementation, it will likely complement rather than replace private healthcare. Significant coverage gaps are inevitable. Quality private healthcare will continue to require additional insurance products to bridge the gaps,” he said.

That is why gap cover is becoming more important. Many people with medical aid still face shortfalls when it comes to specialists, hospital stays, or emergency procedures.

Gap cover helps protect against these costs, and demand for it is rising as medical costs climb faster than scheme benefits.

“NHI implementation delays create extended risk periods. Gap cover provides protection now, not years down the line,” de Carvalho explained.

Looking at the next few years, de Carvalho believes medical aids will remain the main way to pay for private healthcare, while the NHI will be limited to pilot projects.

Gap cover, in this context, is not a luxury but a necessity. In the medium term, even if the NHI starts to roll out, people will still need medical aid and additional insurance.

Beyond 2030, a hybrid system is almost certain, with gap cover likely to evolve into products that work alongside the NHI.

The idea of universal healthcare is appealing, but South Africa faces too many challenges for it to happen quickly.

“For South African families, this uncertainty creates a clear imperative: secure comprehensive healthcare protection that works today, regardless of tomorrow’s policy outcomes.”

“The reality is, healthcare emergencies don’t wait for policy certainty. Neither should your protection.”

 

Article credit: https://businesstech.co.za/news/government/838165/nhi-reality-check-for-medical-aid-members-in-south-africa/