Social Health Insurance

Introduction

Social Health Insurance was first discussed in the late 1980s as a mechanism the public sector could use to harness resources spent in the private sector, thereby improving health care coverage. Several recent documents associated closely with the new government have also highlighted the need for SHI in South Africa (see Table 1).

What is SHI?

Key features that are common to all SHI everywhere are:

• It is legislated by government and requires regular, compulsory contributions by members
• Eligible members cannot opt out of a scheme or be excluded by the scheme
• Premiums are calculated according to ability to pay (i.e. according to income)
• Benefit packages are standardised and
• Contributions are ear-marked for spending on health services

These features make it possible to:

• Have large risk pools' where a stable membership of contributors and their dependants cross-subsidises the care of the elderly, sick and poor with premiums paid by the healthy and wealthy
• Reduce the number of people whose health care has to be funded out of the public budget, and
• Contribute to the public budget through fees paid by SHI members to public services

These characteristics have the effect of improving equity within the membership of the scheme and across the entire health care system.