Ramaphosa finds a pen – doctors and taxpayers find the door

 ·16 May 2024

Tax experts have flagged a spike in applications from medical professionals, medically high-risk individuals, and “cautious taxpayers” seeking assistance emigrating because of the NHI.

Notably, this has been a trend for some time ahead of President Cyril Ramaphosa signing the contentious National Health Insurance Bill into law – which he did on Wednesday (15 May).

Tax Consulting SA said that the signing of the bill has sparked a wave of concern among various South Africans, but especially healthcare professionals, those with illnesses they are not sure will be covered by the NHI and other taxpayers worried about the tax hikes that will follow.

“This healthcare reform initiative promises to provide universal healthcare coverage to all citizens, but its implementation has raised many unanswered questions. This may be the final straw that leads South Africans to emigrate,” the group said.

“Medical professionals have approached us to assist with their potential emigration due to not wanting to work for the government; families with medically at-risk members fearing for their loved one’s future in South Africa; as well as numerous taxpayers uncertain about the tax burden for the funding of these healthcare provisions and the potential burden on the economy.”

Tax Consulting said that the wave of anxiety and interest in emigrating came in response to the initial warnings about the potential challenges associated with the NHI, including uncertainties about funding, taxation and healthcare provisions.

“Many individuals and families have sought professional assistance in emigration and externalising their financials and assets,” it said.

Investec Healthcare Equity Analyst Letlotlo Lenake said earlier in May that the NHI Act, as it currently stands, carries both quantitative and qualitative risks to South Africa.

Quantitatively, the estimated costs of the NHI are unachievable with the country’s tax base, and qualitatively, the resultant impact on resources like doctors and healthcare professionals poses even greater risks to healthcare in the country.

Research and surveys among doctors and other healthcare workers in South Africa regarding the NHI has found that a significant number of these professionals would rather opt to exit the country and find work abroad than be forced to work for the government.

Under the NHI, the state will become the sole purchaser of healthcare services in South Africa. While private hospitals and practices can continue to exist, they must be registered with the NHI, and what the NHI Fund will pay for those services will be capped.

For those with specialised health needs, it is not clear at this stage what the NHI will actually cover, nor what options will be on the table for those patients once the system is fully operational.

Taxpayers, meanwhile, are guaranteed to be paying more taxes to fund the NHI, with an income tax surcharge and payroll tax on the way.

While the NHI has now become a central factor in why doctors and other healthcare professionals may want to leave the country, reports in January 2024 indicated that a host of other problems in South Africa’s healthcare sector are also pushing them out – including low salaries, poor working conditions, and job security.

Immigration specialists for countries like Canada have recorded a notable increase in healthcare professionals and doctors looking to move.

Health minister Joe Phaahla has been at pains insisting that healthcare workers should not panic about the NHI and to ignore the “naysayers” around the system, but his department has left many of the most pressing issues around the NHI (coverage and funding) vague and uncertain.

Legal expert Neil Kirby, Director and Head of Healthcare and Life Sciences at Werksmans Attorneys, said South Africans “don’t know what, in fact, we’re going to be buying.”

“We have no real idea. We have an inkling that it could be primary health care benefits to start. And we know that maternity benefits as a defined benefit along with emergency care benefits are going to be moved into NHI away from medical schemes, so we have an indication, but there is nothing that you can say ‘thank goodness for the NHI’,” he said.

Read: National Health Insurance is now law in South Africa

Show comments
Subscribe to our daily newsletter