NHI costs still to be calculated: finance minister

 ·2 Mar 2022

Finance minister Enoch Godongwana says the government has not updated the cost model of the proposed National Health Insurance (NHI) scheme since the 2019/2020 financial year.

This model will only be updated as the scheme approaches implementation, he said.

Responding in a recent written parliamentary Q&A, Godongwana said this means the economic impact of the Covid-19 pandemic has thus not been factored into the cost model for the scheme.

The most recent data, published in section 8 of the explanatory memorandum to the NHI Bill and the 2019 Medium Term Budget Policy Statement, modelled the medium-term cost of specific NHI interventions at approximately R33 billion per annum by the fifth year.

“The need for and timing of further updates to the model will be determined by practical progress with preparing for the implementation of NHI, spending on the existing NHI allocations, as well as progress with processing the NHI Bill in the two chambers and relevant committees of parliament,” he said.

South Africa’s biggest open medical scheme Discovery has previously estimated that private health spending, including the medical aid financing of around nine million South Africans, currently equates to R212 billion (44%) of total healthcare funding in South Africa.

If medical schemes are eliminated, as is proposed by the NHI Bill, the R212 billion funding gap will need to be absorbed by the state, Discovery said.

“If taxation is used to increase state healthcare budget to this amount, additional 4.1% of GDP needs to be collected in taxes – unlikely to be feasible.

“A more feasible pathway to increase public sector per capita funding is to maintain medical scheme funding, expand access to the employed population while state funds focus on the most vulnerable.”

If the government’s goal is to offer universal healthcare coverage it should instead adopt a blended finance model – similar to those used in the Netherlands, Thailand and Indonesia – which would allow consumers to continue choosing private healthcare providers, while allowing for greater public and private sector integration, Discovery said.

Read: Major medical aid warning for South Africa

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