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NHI details expected soon: expert

Feb 08 2011 18:11
I-Net Bridge
Johannesburg - Some long-awaited clarity on the government's proposed National Health Insurance (NHI) could be in the offing this month in a white paper, according to a tax expert.

At a pre-budget briefing on Tuesday, Ashley Theophanides, an actuary and NHI specialist at Deloitte, said that while the NHI was at the top of the agenda for the ANC, scant details had emerged on its broader impact.

She said President Jacob Zuma might provide more information during his state of the nation address on Thursday, while a white paper expected this month may give further guidance.

Theophanides said there was no clarity on how the NHI would be funded.

Higher VAT contributions are not popular and other options could be a payroll tax or an excise tax, but each option would have different repercussions, she said.

One of the main challenges was that the tax base itself was very low.

But Theophanides said that the ANC expected that health expenditure could increase from 4.5% of gross domestic product to 8% by 2025.

She did not expect a significant increase in the adjustment to healthcare expenditure in 2011 - currently expected to be up R3.1bn  to R112bn.

The NHI is set to kick in from 2012.

Other key issues around the NHI include how its increased burden would weigh against greater demands for education and housing, which would affect how funds are distributed.

Another issue is how medical schemes are treated as they are already under pressure. They could lose lower-income members, making overall costs of medical schemes more expensive.

Theophanides said the broader economic effect needed to be better understood.



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