Posted on 09/24/2010 12:04:45 PM PDT by Diapason
The proposed implementation of South Africa's national health insurance scheme in 2012 will be seen as a bridge too far by most overburdened taxpayers, but some will see it as a necessary evil.
It is necessary because less than 20% of South Africans have access to medical aid and effective treatment.
However, the problem in SA is that the tax base is just so small and could be squeezed a lot by these ambitious aims.
It will certainly tighten the noose a little further on what AJ Jansen van Niewenhuizen from Grant Thornton calls the "golden goose" - the small group of taxpayers that carry the bulk of the personal income tax burden.
In fact, a mere 2.75 million people out of a population of close to 50 million carry 64% of the personal income tax burden and more than 60% of the total tax burden.
The NHI is an emotional hot button right now for these taxpayers because preliminary costing estimates, developed by a costing sub-committee of the ministerial advisory committee, indicate that resource requirements under this model increase from R128 billion in 2012 to R267 billion in 2020 and R376 billion in 2025, expressed in current financial terms (real terms).
Funding methods include a surcharge on taxable income, payroll taxes (for employees and/or employers) and an increase in value added tax which is earmarked for the NHI. However, the main sources of revenue for the NHI Fund will be allocations from general taxation. All of these funds will be combined in the NHI Fund, from which all services covered by the NHI system will be funded.
As emotive as the issue is for the 2.75 million mentioned above, Jackson Mthembu, African National Congress national spokesperson, argues that there is a strong social and economic case to implement it without delay. He points to the right to health care and the need to ensure universal free access to health care, at the point of service, to all South Africans rather than ability to pay.
At the core of NHI would be primary health care, which is the first point of entry into the health system. The report foresees a "reengineered primary health-care system", served by teams, each consisting of a doctor or clinical associate, a nurse and three to four community health workers.
Membership to the NHI would be compulsory for the whole population, but the public can choose whether to continue with voluntary medical scheme cover.
This right to choose is a major issue and led to huge controversy in the US migration - some states threatened to sue over it - because people want the right to choose.
It is likely there will be plenty of healthy debate in SA over this issue too, but it is unlikely to block the passage of the legislation, as did not block it in the US.
Timelines, at least, are wide as implementation will be phased in over 14 years, and roll out will start in 2012 in the seriously underserved areas where people have difficulty accessing health care.
Noble aims one and all and in line with the sentiments of Barack Obama in getting the US national scheme through Congress, which was no easy task as American taxpayers have never been keen on bailing out the destitute.
Not one comment I have seen form the general public has been positive about the changes and it seems most people are getting very heated about it. Of course, these are the guys within or on the fringes of the 2.75 million carrying 64% of the tax burden.
But in the broader context, there are some positives as medical aids will need to tighten up on competition to retain members as many poor members on medical aids can't afford it and are likely to terminate membership once the new scheme is in place.
Mthembu believes the NHI will provide comprehensive quality health care at less than the current spending by the public and private health sectors.
But the costing sub-committee's preliminary findings suggest that the health sector's share of the overall government budget will need to increase from 12% to 14.5%.
This means we are staring down the barrel of tax increases.
The most effective increase, though, could be via VAT as the impact on revenue for the fiscus will be more pronounced - a 1% change in VAT will bring in far more than tinkering with other smaller taxes elsewhere.
A VAT increase has always been a political hot potato, but the move to NHI is an even more emotive issue. As little impact as possible on "golden goose" will be important.
Healthcare “reform” is just the latest Malthusian scheme to kill vast numbers of human beings while pretending to help.
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