New deadline for controversial NHI
The Select Committee on Health and Social Services has extended the deadline for public comments on the contentious National Health Insurance (NHI) Bill by two weeks.
The purpose of the NHI is to ensure access to quality healthcare for all South Africans, and it will establish a fund that covers nearly all medical treatment from accredited providers at rates set by the government.
The Select Committee on Health and Social Services said it received numerous requests from stakeholders to extend the date on written submissions for the act.
The committee has obliged by extending the deadline from Friday, 1 September 2023 to Friday, 15 September 2023.
The Bill is already before the National Council of Provinces (NCOP) after being passed by Parliament in June, in spite of vehement opposition.
Should it pass at the NCOP, it will then be sent to President Cyril Ramaphosa to be signed into law.
Controversy
The Bill has received wide criticism from the private healthcare sector and has been questioned on its constitutionality by medical aid providers, the public, business leaders and even parliament’s own legal service.
In principal, most stakeholders are not against the idea of the NHI and universal healthcare; however, in a South African context, issues of affordability, corruption, skill capacity and state competence have repeatedly been flagged as barriers to its implementation and efficacy in the country.
One of the biggest issues with the Bill is regarding funding, with Health Minister Joe Phaahla saying, vaguely, that the government will pay for the scheme – meaning that taxpayers will foot the bill.
The government itself has not provided any estimate for how much money will be required to run the scheme, but researchers have put the total cost anywhere between R300 billion and R660 billion a year.
Even without an official figure, the NHI will undoubtedly be one of the largest expenses in the South African budget by a significant margin. At the same time, available funds are shrinking due to the government’s poor economic policies.
“Looking at 2026 – the year in which the NHI is supposed to be implemented – an enormous extra R296 billion will be required in order to balance the books,” the Solidarity Research Institute (SRI) said.
“This is unheard of for a middle-income country, where spending on education usually enjoys the highest priority. While more affluent countries spend more on healthcare, social grants usually receive the highest priority, never health,” said the SRI.
Currently, South Africa does not have the budget to afford the NHI, with it only being possible if taxes are increased. South African taxpayers are already overtaxed.
The SRI said that the R296 billion could possibly be gained by removing the medical tax credit (roughly R30 billion) and levying the following taxes:
- A 40% surcharge on income tax
- Increasing VAT from 15% to 22%
- A payroll tax of 13.4%
- Increasing corporate income tax from 27% to 45%
- A combination of these
“In real terms, none of these is possible because the South African taxpayer is already overtaxed. These theoretical suggestions serve for illustration only and to demonstrate their absurdity,” the group said.
Discovery Health CEO Ryan Noach said that any further increases in taxes could lead to a tax revolt in the country.
There have also been question marks over the role of private healthcare providers – who will not be able to set their own prices for NHI services – whilst medical aids will also be out of the picture.
Despite the government saying that the NHI won’t kill private healthcare, it has admitted that the scope of medical aid will be dramatically reduced, with the NHI hoping to cover everything except “unnecessary” procedures.
However, Momentum argued that allowing affordable health insurance from the private sector could alleviate the pressure on public healthcare facilities, as the private sector can still co-exist with the NHI.
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