Background The South African government is implementing National Health Insurance as a monopsony health care financing mechanism to drive the country towards Universal Health Coverage. Strategic purchasing, with separation of funder, purchaser and provider, underpins this initiative. The NHI plans contracting units for primary healthcare services to function as independent sub-district purchasers and District Health Management Offices to support and monitor these contracting units. This decentralised governance model to the operational unit of primary healthcare, the heartbeat of any universal healthcare system, is critical to programme success. The views of district-level managers, who are at the centre of the planned phased rollout will shed light on current policy implementation.ObjectivesThis is a qualitative study to explore district and sub-district managerial views on National Health Insurance and its implementation. Methods Purposive sampling was used to identify key respondents from a major urban district in Gauteng, South Africa, for participation in exploratory in-depth interviews. This study employed framework analysis within MaxQDA software for robust thematic analysis. Results Managers viewed National Health Insurance as a social and moral imperative but lacked clarity and insight into the National Health Insurance Bill and relevant implementation strategies. The majority of respondents had not received any engagement or had the opportunity to engage in policy formulation. District managers highlighted several pitfalls in current organisational operations. National and provincial government continue to function in a detached and rigid top-down hierarchy. The voices of coalface managers and workers, who live the reality of South African healthcare service provision, go unheard and unengaged. The findings of this study dishearteningly echo lessons already learned around established pillars of universal healthcare implementation such as human resources, multi-lateral stakeholder engagement and collaboration, devolution of governance with empowerment and capacitation of district managers. These findings imply that the South African Government has failed to anticipate and address these challenges and raises questions around reflective and experiential practices of the South African government. Conclusion It appears that strategic purchasing is not being operationalised in PHC. NHI policy implementation appears trapped in a rigid top-down hierarchy. District managers need to be engaged and capacitated to operationalise the planned decentralised purchasing-provision function of NHI.