Is the NHI Act Unconstitutional? Inside South Africa’s Landmark 2026 Court Challenge

As the NHI Act transitions into its second implementation phase in 2026, South Africa’s healthcare landscape has become a high-stakes legal battlefield. While the government pushes forward with universal coverage, the Act faces nine separate court challenges that argue the legislation is unconstitutional and fiscally unsustainable. From the disputed funding mechanism involving the phase-out of medical scheme tax credits to the litigation surrounding the survival of private medical schemes, the judiciary must now decide if the state’s "monopsony" model violates fundamental rights.

This article examines the core legal friction points and the landmark reports from HASA and Solidarity that characterize the NHI as a "fiscal impossibility," threatening the right to access healthcare for millions of South Africans.

The Legal Crossroads of 2026

South Africa’s National Health Insurance (NHI) Act 20 of 2023 stands at a decisive legal crossroads. While the Act was signed into law in May 2024, its implementation has transitioned from a legislative debate into a high-stakes judicial battle. As of January 2026, the Act faces at least nine separate court challenges from medical schemes, professional associations, and civil society groups.

These challenges target the Act's foundational principles, primarily focused on the constitutionality of its funding mechanisms and the proposed phase-out of private healthcare options.

1.         The Funding Mechanism Friction Point - a central pillar of the NHI's financial strategy is the repurposing of existing private healthcare expenditure into the state-managed NHI Fund -

·       The Medical Scheme Tax Credit Phase-Out - the government intends to fund the NHI partly by removing medical scheme tax credits, a move anticipated to start in the 2026/27 financial year. Critics argue this will result in an "actuarial death spiral" for private schemes as membership becomes unaffordable for millions, forcing them into an already overburdened public system.

• Fiscal Irrationality and Vague Costing - litigants, including the Health Funders Association (HFA), contend that the Act is substantively irrational because it lacks a transparent, comprehensive costing exercise. They argue that the state cannot realistically raise the necessary funds through taxes alone in South Africa's current fiscal environment.
• Unconstitutional Delegation of Power - the Act has been challenged for granting the Minister of Health and the finance minister overly broad, unchecked powers to determine funding and service packages without sufficient Parliamentary oversight.

2.         The Future of Private Medical Schemes - Section 33 of the Act remains the most contentious provision, stipulating that once the NHI is "fully implemented," private medical schemes will be restricted to providing only "complementary cover" for services not covered by the Fund -

• Infringement of Constitutional Rights - legal challenges from groups like Solidarity and the Hospital Association of South Africa (HASA) argue that this restriction violates Section 27 of the Bill of Rights, which guarantees the right to access healthcare services. They contend that preventing individuals from purchasing private insurance when the state cannot yet provide an equivalent alternative is unconstitutional.
• International Precedents - litigants have pointed out that most nations with universal health coverage—such as Brazil, Thailand, and Mexico—permit parallel private schemes, making South Africa’s proposed single-payer "monopsony" model an extreme and unproven outlier.
• Freedom of Choice and Association - some applications focus on the infringement of individuals' rights to choose their preferred healthcare providers and health insurance models, arguing that the NHI creates an unlawful state monopoly.

3.         Current Procedural and Judicial Status - the Department of Health maintains that judicial review is the "correct and legitimate route" but insists that the NHI is law and currently in its Phase 2 implementation (2026 - 2028) -

• Out-of-Court Settlement Offers - in January 2026, Finance Minister Enoch Godongwana called for litigants to settle out of court to avoid further delays. However, major groups like the Western Cape government and Sakeliga have rejected these calls, stating they will not abandon their cases unless the Act is substantially amended or withdrawn.
• Constitutional Court Oversight - several matters, including a ruling on the rationality of private practice limits, have moved to the Constitutional Court of South Africa, which reserved judgment in late 2025 and is expected to deliver a landmark ruling in 2026 that could determine the Act's ultimate survival.

Constitutional Sections Under Scrutiny

The legal challenges brought by Solidarity, the Hospital Association of South Africa (HASA), and other litigants in 2026 centre on several foundational sections of the Constitution of the Republic of South Africa, 1996. These arguments suggest that while the NHI's goal of universal coverage is valid, the legislative means chosen to violate fundamental individual and institutional rights.

1.            Section 27: Right of Access to Healthcare - this is the primary battleground. Section 27(1)(a) guarantees everyone the right to access healthcare services.

·       Progressive vs. Retrogressive Realisation - under Section 27(2), the state must take "reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of this right".

·       The Litigants' Argument - groups like HASA argue the NHI is a retrogressive measure. They contend that by effectively dismantling the private sector before a viable public alternative exists, the state will reduce the current level of access for millions, thereby violating Section 27.

2.            Section 22: Freedom of Trade, Occupation, and Profession - Section 22 states that every citizen has the right to choose their trade, occupation, or profession freely.

• The Certificate of Need (CoN) - Solidarity’s challenge, which saw a major High Court victory in late 2024 (now at the ConCourt), targets the requirement for doctors to obtain a "certificate of need" to practice in specific areas.
• The Litigants' Argument - they argue this requirement constitutes an arbitrary impairment of the right to practice a profession, as it allows the state to dictate where private practitioners can work.

3.            Section 25: Property Rights - litigants argue that the NHI Act threatens the property rights of private healthcare establishments.

• Arbitrary Deprivation - litigants contend that the "certificate of need" and the forced shift to a single-payer system amount to the arbitrary deprivation of property. They argue that private hospitals and practices are assets that could be rendered unviable by state-mandated patient allocations or pricing.

4.            Section 217: Procurement and Competition - Section 217 mandates that government procurement must be "fair, equitable, transparent, competitive and cost-effective".

• The Litigants' Argument - HASA specifically challenges the NHI Fund’s exemption from the Competition Act. They argue this creates a quasi-monopolistic purchaser that avoids the constitutional requirement for competitive procurement, potentially leading to inefficiency and corruption.

5.            Section 33: Just Administrative Action - while Section 33 of the NHI Act limits medical schemes, Section 33 of the Constitution guarantees the right to administrative action that is lawful, reasonable, and procedurally fair.

• The Litigants' Argument - litigants argue that the implementation steps - such as the planned phase - out of tax credits - lack rationality because they are being enacted without a finalised costing model or feasibility study.

6.            Procedural Challenges (Sections 79 and 167)

• Section 79: The Board of Healthcare Funders (BHF) is challenging the President’s decision to sign the Bill. They argue he failed to refer it back to Parliament despite receiving warnings of its unconstitutionality, violating his duty under Section 79(1).
• Section 167: Disputes also exist over whether the Constitutional Court has exclusive jurisdiction to hear these matters or if they should first be exhausted in the High Courts.

The Constitutional Court’s decision in 2026 will ultimately hinge on a limitations exercise under Section 36 of the Constitution, weighing the state’s transformative objectives against the potential infringement of these individual rights.

The "Fiscal Impossibility" Argument: Data from HASA and Expert Reports

HASA has based its primary defence on the economic viability of the Act. Central to their 2026 litigation is a series of financial impact assessments that suggest the NHI’s current trajectory is a "fiscal impossibility."

• The Funding Gap - HASA cites a projected funding shortfall of roughly R457 billion. According to expert analysis from the Berkeley Research Group, there’s no feasible financing mechanism under current economic conditions that can bridge this gap without crippling the national economy.
• The Genesis Analytics Report - this report highlights that to fund the NHI via personal income tax, the average tax rate would essentially need to double. Such a move would likely lead to "taxpayer flight," further shrinking the revenue base.
• The "Actuarial Death Spiral" - HASA’s reports emphasise that the removal of medical scheme tax credits - set for the 2026/27 financial year - will serve as a catalyst for the collapse of private schemes. By making private cover unaffordable before the NHI is operational, the state risks a "retrogressive" event where millions lose existing coverage with no functional replacement.

The Constitutional Limitations Test

As the Constitutional Court of South Africa prepares to deliver its verdict in 2026, the case will ultimately hinge on the Section 36 Limitations Clause. The court must weigh the government's legitimate objective of achieving universal healthcare against the potential infringement of rights to property, trade, and existing health access.

If the court finds that the NHI Act lacks a rational connection between its funding mechanisms and its implementation goals, the legislation may be sent back to Parliament for substantial redrafting. For now, the 2026 judicial showdown remains the ultimate arbiter of South Africa’s healthcare future.

2026 Judicial Calendar - Key Deadlines and Court Appearances

The survival of the NHI Act depends on a series of high-stakes court dates scheduled throughout 2026. These appearances represent the culmination of years of legal preparation by the private sector and civil society -

• February 2026 - The HASA and BHF Consolidations - HASA and the Board of Healthcare Funders (BHF) are expected to have their matters heard in a consolidated high-court session. This hearing will focus specifically on the fiscal irrationality of the Act and the procedural irregularities regarding Section 79 of the Constitution.
• April 2026 - The Solidarity Constitutional Court Finality - following its High Court victory regarding the "Certificate of Need," Solidarity is scheduled for a final confirmatory hearing at the Constitutional Court of South Africa. A ruling in favour of Solidarity here would effectively strike down the state’s power to dictate where private practitioners can work, removing a central pillar of the NHI’s regulatory framework.
• June 2026 - The 2026/27 Budget Speech Challenge - should the National Treasury move to formally repeal medical scheme tax credits in the mid-year fiscal adjustment, the HFA has prepared an urgent interdict to halt the implementation of this funding shift until the main constitutional challenges are resolved.
• September 2026: The "Section 33" Showdown - the most anticipated event of the year is the direct challenge to Section 33 of the NHI Act (the restriction of private medical schemes). This case is expected to reach the Constitutional Court by late 2026, serving as the "make or break" moment for the single - payer model.

Conclusion - The Political and Systemic Stakes of a Judicial Veto

As the Constitutional Court prepares to deliver its definitive rulings in late 2026, the implications extend far beyond the legal fraternity. A judicial finding that key components of the NHI Act are unconstitutional would trigger a massive political and systemic realignment in South Africa.

·       Policy Redrafting or Repeal - if the court upholds the arguments by Solidarity regarding the "Certificate of Need" or HASA regarding fiscal irrationality, the Department of Health will be forced to return to the National Assembly. This could result in a "diluted" NHI that permits a multi-payer system, similar to successful international models, rather than the proposed state monopoly.

·       Economic Market Stability - the 2026 rulings will provide much-needed certainty for the private healthcare sector. A decision protecting private medical schemes would likely trigger a surge in healthcare investment and stabilize the "actuarial death spiral" currently threatening the industry.

·       The Reform Mandate - conversely, if the state prevails, the ruling will grant the government a mandate for the most radical social reform since 1994. However, the state would still face the monumental task of addressing the "fiscal impossibility" highlighted by Genesis Analytics without collapsing the tax base.

Ultimately, the 2026 court challenges represent the final "check and balance" in South Africa’s democracy. Whether through the preservation of private choice or the forced evolution of the public system, the judiciary’s intervention will define the quality and accessibility of healthcare for the next generation.

Disclaimer: The Evolving Nature of Legal Proceedings

This article is based on the legal landscape and judicial filings as of January 2026. Because the litigation surrounding the NHI Act involves multiple jurisdictions and high-stakes Constitutional Court oversight, the status of specific provisions - such as the Section 33 phase-out or the Section 22 professional practice rights - is subject to rapid change.

Court dates and implementation timelines, particularly the repeal of medical scheme tax credits, may be delayed or altered by urgent interdicts or executive amendments. Readers are encouraged to consult official court rolls at the South African Judiciary or updates from lead litigants like Solidarity and HASA for the most current procedural status.

This analysis does not constitute formal legal advice.

We have taken the utmost care to ensure that the above information is correct, but we urge you to consult with a suitably qualified legal practitioner who will be able to assist you should you have any questions or require assistance regarding the NHI. Please feel free to contact us to see how we can best assist.

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(Sources used and to whom we owe thanks – Moonstone here, here and here; Businesstech here and here; Daily Maverick; IOL; EWN; HFA Association here and here; McMas; Retail Medical Scheme; Daily Investor; Times Live; HASA; FA News; Simeka Health; WITS School of Governance; Profmed; Spotlight here and here; YouTube; Sabinet; Schindler’s and Solidarity Trade Union and Others v Minister of Health and Others (61844/2021) [2024] ZAGPPHC 677; [2024] 4 All SA 264 (GP); 2024 (11) BCLR 1451 (GP); 2024 (6) SA 639 (GP) (24 July 2024)).