LETTER: NHI undermines security and predictability
28 May 2024 - 17:51
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Health Minister Joe Phaahla. Picture: FREDDY MAVUNDA
Health minister Joe Phaahla recently told South Africans, “medical aid schemes are still there. So keep your medical aid. Everything will be transparent. Please, don’t throw away your medical aid schemes and stop your debit order.”
To facilitate the funding of the National Health Insurance (NHI), a money bill will need to be presented to parliament. This bill needs to provide for the various financing arrangements for the NHI fund. Among the range of “arrangements” that could bring in revenue and resources for the fund are a general surcharge on personal income tax; an employer and employee payroll tax; and the removal of the individual medical schemes tax credit.
On the one hand, South Africans are told to continue paying for medical aid — on the other, that they may in the future be subjected to higher and/or additional taxes. In the country’s low-growth, declining GDP per capita context, the NHI poses a substantial risk to individual’s economic freedom, and their choice as to the healthcare services and products they consider to offer the most value for money.
At some point in the future, once the minister of health declares the NHI to be fully implemented, medical schemes will not be able to offer most of the basic services that they now provide. They will only be allowed to provide “complementary cover”. For the management and administrators of medical schemes, do they take the risk of building on their current systems and offerings, to invest in the future, to compete and innovate?
The NHI Act already provides that the Medical Schemes Act is to be amended with immediate effect to remove maternity and pregnancy-related benefits from the scope of medical schemes. Is this in force? Two things that investors and markets look for (and that underpin higher growth rates) are predictability and security. Arguably, the NHI undermines both these (in the private and public spheres) to a substantial degree.
Chris Hattingh Centre for Risk Analysis
JOIN THE DISCUSSION: Send us an email with your comments toletters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: NHI undermines security and predictability
Health minister Joe Phaahla recently told South Africans, “medical aid schemes are still there. So keep your medical aid. Everything will be transparent. Please, don’t throw away your medical aid schemes and stop your debit order.”
To facilitate the funding of the National Health Insurance (NHI), a money bill will need to be presented to parliament. This bill needs to provide for the various financing arrangements for the NHI fund. Among the range of “arrangements” that could bring in revenue and resources for the fund are a general surcharge on personal income tax; an employer and employee payroll tax; and the removal of the individual medical schemes tax credit.
On the one hand, South Africans are told to continue paying for medical aid — on the other, that they may in the future be subjected to higher and/or additional taxes. In the country’s low-growth, declining GDP per capita context, the NHI poses a substantial risk to individual’s economic freedom, and their choice as to the healthcare services and products they consider to offer the most value for money.
At some point in the future, once the minister of health declares the NHI to be fully implemented, medical schemes will not be able to offer most of the basic services that they now provide. They will only be allowed to provide “complementary cover”. For the management and administrators of medical schemes, do they take the risk of building on their current systems and offerings, to invest in the future, to compete and innovate?
The NHI Act already provides that the Medical Schemes Act is to be amended with immediate effect to remove maternity and pregnancy-related benefits from the scope of medical schemes. Is this in force? Two things that investors and markets look for (and that underpin higher growth rates) are predictability and security. Arguably, the NHI undermines both these (in the private and public spheres) to a substantial degree.
Chris Hattingh
Centre for Risk Analysis
JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
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