The new role of medical aids under the NHI

While reports indicate that the National Health Insurance (NHI) could be funded by ‘scrapping’ medical aid tax credits, it won’t necessarily sound the death knell for private health schemes in South Africa, according to Legalbrief’s Pam Saxby.

Speaking at the launch of the new NHI policy document on Thursday, health minister Aaron Motsoaledi had indicated that not only will the NHI be compulsory, but could also be considered as a replacement for medical aids.

He said that the NHI will be partially funded by ‘scrapping’ tax credits for medical scheme members altogether, which was raised as a point of concern. However, the policy document itself does not envisage the use of tax credits for direct funding, according to Saxby.

“Tax credits and subsidies in respect of state and private medical schemes to which government employees belong, could be targeted to reduce the tax increases envisaged for funding national health insurance (NHI),” said Saxby.

“The paper’s chapter on NHI financing acknowledges that these requirements remain ‘uncertain’ and will depend ‘in part’ on public health system improvements and medical scheme regulatory reforms ‘not yet … fully articulated’.”

Saxby also confirmed that the most preferable option mentioned in the White Paper for generating the necessary revenue would be “a payroll tax payable by employers and employees”, along with “a surcharge on individual taxable income”.

Medical Aids still necessary according to NHI

While the legislation is still not clear on the role of medical aids under the NHI, it does concede that “irrespective of how comprehensive NHI entitlements … (may eventually) be, some personal healthcare services will not be covered’ by the system’s mainstream, medically necessary, efficacy-proven interventions.”

This points to the need for ‘complimentary’ cover, albeit through ‘transformed’ medical schemes, Saxby said.

“According to the White Paper, while it is possible to ‘indicate the broad magnitude of tax changes that might be required’ to finance NHI, these are presented to ‘illustrate the tax implications of a shift from private insurance to NHI funding’,” she said.

Read: How you’ll be paying for National Health Insurance – more taxes

Must Read

Partner Content

Show comments

Trending Now

Follow Us

The new role of medical aids under the NHI