NHI scheme 'on hold'

Cape Town - It would appear that the introduction of a national health insurance system (NHI) has been put on ice.

This means that millions of South Africans who are members of medical funds will, for now, not be forced to use the services of a state-funded healthcare provider.

Until recently the ANC said it wanted to introduce the NHI as soon as possible, but the medium-term budget framework has not allocated funds for it for the next three years.

Minister of Finance Pravin Gordhan said emphasis would first fall on fixing the state's health service.

Economists.co.za economist Mike Schüssler said government seemed to have gained a degree of realism about an NHI. "Now would be an impossible time to introduce unnecessary taxes," he said. Dries la Grange, chief executive of Bestmed medical scheme, said the fact that no provision has been made for the NHI until 2013 meant that the next three years will not see significant changes.

However, the building blocks are being laid for a national health insurance through the allocation of additional funds for health services. Over the next three years the health budget will rise by an estimated 8.6% to R115bn.

Gordhan also said there was a need to return to the discussions on the NHI.

According to the Finance Minister, the focus was now on the upgrading of hospitals and hospital management, as well as the restructuring of the healthcare industry's purchasing system. Only then will come the turn of establishing a political framework that spells out the fiscal implications of the planned NHI.

Period of grace

From Gordon's words it was clear that the NHI would be introduced only once the current health system had been restructured. Players in the South African health-care system all agree that change is necessary, as more than 40m people without medical aid have to rely on deteriorating state medical services.

Econex economist Dr Nicola Theron said the period of grace will offer opportunities for consultation with industry players. "Earlier, rumours had it that the NHI would be here so fast that we would not even see a Green Paper."

In a provisional NHI document by the ANC task team, progressive taxation was proposed to fund the NHI. In practical terms this meant the more one earns, the more one pays.

According to independent health economist Alex van den Heever, the document proposals indicated that the NHI would require a budget of R8bn a year. Then an additional R80bn to R100bn would be necessary to set up a comprehensive healthcare system, he explained.

This would mean additional health taxation estimated at between 12.3% and 15.4%. So far, the ANC has said that it hopes the NHI can be introduced by 2014, but it has not criticised Gordhan's budget plans.

- Sake24.com

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