Government plan to scrap tax credit could push 1.9 million people out of medical aid
If the tax credit is removed, 22% of medical aid users will not be able to afford cover, Stellenbosch economics consultancy Econex warned
The government's plan to ditch medical aid tax credits will have a disastrous effect on already cash-strapped South Africans and force nearly 2 million people onto the over-stretched state health system. If the tax credit is removed, 22% of medical aid users will not be able to afford cover, Stellenbosch economics consultancy Econex warned in a report published on Friday - 1.9 million of the 8 million medical aid members, including children, will have to drop out of the private healthcare system. In a national health insurance policy document released in July, Health Minister Aaron Motsoaledi said he wanted to remove the tax credit to users, which amounts to R20-billion a year. Medical aid schemes' members get a tax reduction of R3,636 a year - or R303 a month. Motsoaledi said then that "the tax credit ... we believe, is unfair". Economist Paula Armstrong, author of the Econex analysis, said the rebate was intended to "alleviate some pressure on the state [system]". Taking it away w...
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