LETTER: How to break NHI stalemate

The stalemate that appears to have been reached between government and business on the question of National Health Insurance (NHI) can be broken.

Distilled to its essence, government’s NHI proposal comes down to nationalising much of the private healthcare industry. The counter from the business community has been that this is unaffordable and unconstitutional and that the focus should instead be on fixing the public sector — a position which to the extent that it is correct is also politically uncompelling.

A middle ground is achievable. Insurance is made mandatory for all employed people. For low-wage earners (the thresholds can be thrashed out by actuaries and unions) the costs would be borne by employers. Above a certain threshold, a balance of matched contributions can be made.

The extent and nature of employer contributions would be phased in over time, low-fee medical insurance products would be introduced to allow for this, and various tax and empowerment inducements made available — skewed especially to employers financing the cover of SA’s lowest-wage earners.

High-income earners would be obliged to pay for their own insurance. Insurance would be purchased either from the state, which would compete with the private sector via a state-run national insurance fund, or from private providers.

If private insurance and medical costs are inflated as some in the state allege, the presence of a state-owned fund would expose this and put an end to it. The state-owned fund would be a behemoth given that the unemployed, poor and destitute would automatically become members, and it would negotiate to buy services from private sector providers — ideally under the supervision of a regulator staffed by public and private experts.

Given that those who can pay for cover will be obliged to do so, the new state fund will have much increased resources relative to the current health budget to devote to the poor. Concomitantly, as more people are insured, and as they receive access to good primary care, overall medical cover costs will significantly reduce.

This is an approach to the NHI stalemate that politicians, trade unions, business and activists should be able to get behind.       

Frans Cronje
Frans Cronje Private Clients 

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