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NATIONAL health insurance (NHI) looks set to cure at least one ill: hypochondria.
The new universal healthcare system may affect you in many ways. For some people, it could hike medical costs considerably, while for others it could curb the tendency to run to health specialists for every ache and pain.
Last month, the ANC gave momentum to the NHI process, announcing when it will be implemented (starting 2012, phased in over 14 years) and giving some indication on how it will be funded (your pocket).
While the NHI has come under heavy criticism, there is consensus that healthcare in SA needs an overhaul.
According to a recent report in the SA Medical Journal, about 8.5% of SA's gross domestic product (GDP) is spent on health.
About 5% of GDP goes towards the 7 million people in private healthcare, while 3.5% caters for the other 41 million people.
The ANC's plan is to give everyone free, improved healthcare.
If you earn an income, you will be required to pay a percentage as an "NHI tax". Other taxes, including a hike in VAT, are also on the cards. Tax deductions for medical contributions – currently worth R10bn to R15bn a year – will be phased out.
Government plans to spend billions on revamping hospitals and aims to fill all vacant posts in the public health system by 2012, but private hospitals are also expected to be contracted in to provide NHI services. Some doctors in private healthcare may be accredited with the NHI to treat patients.
You can also choose to remain a member of a medical scheme, but you will still have to pay the NHI tax and will lose your tax deductions on contributions.
While there still are huge uncertainties, particularly over the role of the private sector, there are some steps you can take to safeguard yourself against NHI fallout.
1. Start saving
You should consider putting money away now to make provision for the NHI's impact on your finances, says Len Deacon, CEO of the Topmed medical scheme. Deacon, a former head of Anglo American's medical scheme and is also an independent consultant, expects the NHI to certainly hike healthcare costs for many people.
Currently, it looks like a dedicated NHI tax of between 3.5% and 5% will be levied on your salary from 2012.
On a salary of R20 000 that could be under R1 000 – similar to what most people would be paying now for a comprehensive option, says Heidi Kruger, spokesperson for the Board of Healthcare Funders, a body which represents medical schemes.
However, other taxes, including VAT, will also be hiked to fund the NHI. Also, tax allowances on medical aid contributions will be scrapped. One study has suggested that the income tax rate for high income earners will climb from 41% to 45%.
This makes it important to invest an additional amount to make sure you have enough savings to tide you over, should you decide to remain a medical scheme member and face a squeeze on your disposable income.
2. Take a look at your medical aid
While most medical scheme members will try to cling to their membership ("out of fear of dying in a state hospital"), it is expected that those with lower incomes will be driven out of medical aids because they won't be able to afford them, says Dr Peter Breitenbach, a healthcare analyst at the global consulting firm Frost & Sullivan.
According to an estimate of the University of Cape Town, 40% of medical scheme members will give up their membership and rely on state services only.
However, Deacon thinks that a bigger number of employed individuals will hold onto their medical scheme memberships, if they can afford the cost.
"It is (now) clear that the NHI will be based on the public health system and way of treating patients. This means that strict referrals from nurses to GPs and only then to specialists will be adhered to. Also, it is clear the benefits will be very different to what medical scheme members have been used to.
"Initially the service standards will not be the same in the public system as patients have been used to in the private sector. Over time with the 10-point plan of the department of health it is hoped this will change," Deacon adds. (The plan includes improving infrastructure and management in state health.)
Still, he expects that the number of medical schemes will shrink from more than a hundred currently to about 30 in the next 10 years.
Some of the big closed schemes (provided by employers) are expected to get involved in the administration of the NHI, while "open" medical schemes may create new top-up products (medical aid that will only give you cover for certain illnesses, like cancer).
Smaller, marginal medical schemes may be squeezed out in the process, begging the question whether their members should jump ship now and join a bigger scheme, where they can build up a membership track record.
Kruger doesn't think this is necessary and says the NHI will be phased in gradually over a number of years.
3. Identify your own risk
Top-up medical cover is expected to be an integral part of the NHI, although it remains to be seen whether medical schemes' actuarial models will show that is viable, says Breitenbach.
For example, you may be able to buy "top up" which will pay out for cancer treatment.
It may be worth your while to study your family history to see what diseases you may be prone to. Hereditary illnesses include asthma, multiple sclerosis, cancer, diabetes, heart disease, hypertension and obesity. This will allow you to make an informed decision about which extra cover you would need under the new system. (Make sure you already have sufficient benefits for these high risk illnesses in your current medical scheme.)
It is likely that there will be room for top-up cover to also provide for "nice-to-haves" not included in the NHI benefit package, says Kruger. An example of this could be orthodontics.
4. Change your medical mindset
The NHI will bring a much larger focus on preventative and primary medical care with greater use of clinics, midwives and GPs, while specialists will only be accessed through a strict referral system.
This will force many medical scheme members, who currently think nothing of visits to specialists like paediatricians or gynaecologists, to change their way of thinking about what really requires specialist attention.
If your current GP, specialist or dentist receives NHI accreditation to treat state patients, their workloads are expected to increase dramatically and this will have an impact on your waiting time for treatment.
The same is true for an NHI-accredited private hospital, which will have to make changes to handle increased workflow.
For example, those who consider themselves too posh to push may be in for a shock.
At 65%, SA private healthcare has one of the highest rates of caesarian sections in the world. The global average is below 20%.
The rocketing rate of C-sections in SA has been blamed on the package of minimum benefits medical schemes are required to provide by law, which includes the procedure.
However, the NHI looks set to change this, forcing pregnant women to use midwives as a first port of call, and giving access to specialists in very specific circumstances.
5. Take responsibility for your own health
It will be more important than ever to take care of yourself and avoid unnecessary health risks.
Some of the most common diseases in SA are hypertension, obesity and diabetes – all of which may be prevented, says Kruger.
Investing in lifestyle changes now may save you a lot of money later.
- Fin24.com
The new universal healthcare system may affect you in many ways. For some people, it could hike medical costs considerably, while for others it could curb the tendency to run to health specialists for every ache and pain.
Last month, the ANC gave momentum to the NHI process, announcing when it will be implemented (starting 2012, phased in over 14 years) and giving some indication on how it will be funded (your pocket).
While the NHI has come under heavy criticism, there is consensus that healthcare in SA needs an overhaul.
According to a recent report in the SA Medical Journal, about 8.5% of SA's gross domestic product (GDP) is spent on health.
About 5% of GDP goes towards the 7 million people in private healthcare, while 3.5% caters for the other 41 million people.
The ANC's plan is to give everyone free, improved healthcare.
If you earn an income, you will be required to pay a percentage as an "NHI tax". Other taxes, including a hike in VAT, are also on the cards. Tax deductions for medical contributions – currently worth R10bn to R15bn a year – will be phased out.
Government plans to spend billions on revamping hospitals and aims to fill all vacant posts in the public health system by 2012, but private hospitals are also expected to be contracted in to provide NHI services. Some doctors in private healthcare may be accredited with the NHI to treat patients.
You can also choose to remain a member of a medical scheme, but you will still have to pay the NHI tax and will lose your tax deductions on contributions.
While there still are huge uncertainties, particularly over the role of the private sector, there are some steps you can take to safeguard yourself against NHI fallout.
1. Start saving
You should consider putting money away now to make provision for the NHI's impact on your finances, says Len Deacon, CEO of the Topmed medical scheme. Deacon, a former head of Anglo American's medical scheme and is also an independent consultant, expects the NHI to certainly hike healthcare costs for many people.
Currently, it looks like a dedicated NHI tax of between 3.5% and 5% will be levied on your salary from 2012.
On a salary of R20 000 that could be under R1 000 – similar to what most people would be paying now for a comprehensive option, says Heidi Kruger, spokesperson for the Board of Healthcare Funders, a body which represents medical schemes.
However, other taxes, including VAT, will also be hiked to fund the NHI. Also, tax allowances on medical aid contributions will be scrapped. One study has suggested that the income tax rate for high income earners will climb from 41% to 45%.
This makes it important to invest an additional amount to make sure you have enough savings to tide you over, should you decide to remain a medical scheme member and face a squeeze on your disposable income.
2. Take a look at your medical aid
While most medical scheme members will try to cling to their membership ("out of fear of dying in a state hospital"), it is expected that those with lower incomes will be driven out of medical aids because they won't be able to afford them, says Dr Peter Breitenbach, a healthcare analyst at the global consulting firm Frost & Sullivan.
According to an estimate of the University of Cape Town, 40% of medical scheme members will give up their membership and rely on state services only.
However, Deacon thinks that a bigger number of employed individuals will hold onto their medical scheme memberships, if they can afford the cost.
"It is (now) clear that the NHI will be based on the public health system and way of treating patients. This means that strict referrals from nurses to GPs and only then to specialists will be adhered to. Also, it is clear the benefits will be very different to what medical scheme members have been used to.
"Initially the service standards will not be the same in the public system as patients have been used to in the private sector. Over time with the 10-point plan of the department of health it is hoped this will change," Deacon adds. (The plan includes improving infrastructure and management in state health.)
Still, he expects that the number of medical schemes will shrink from more than a hundred currently to about 30 in the next 10 years.
Some of the big closed schemes (provided by employers) are expected to get involved in the administration of the NHI, while "open" medical schemes may create new top-up products (medical aid that will only give you cover for certain illnesses, like cancer).
Smaller, marginal medical schemes may be squeezed out in the process, begging the question whether their members should jump ship now and join a bigger scheme, where they can build up a membership track record.
Kruger doesn't think this is necessary and says the NHI will be phased in gradually over a number of years.
3. Identify your own risk
Top-up medical cover is expected to be an integral part of the NHI, although it remains to be seen whether medical schemes' actuarial models will show that is viable, says Breitenbach.
For example, you may be able to buy "top up" which will pay out for cancer treatment.
It may be worth your while to study your family history to see what diseases you may be prone to. Hereditary illnesses include asthma, multiple sclerosis, cancer, diabetes, heart disease, hypertension and obesity. This will allow you to make an informed decision about which extra cover you would need under the new system. (Make sure you already have sufficient benefits for these high risk illnesses in your current medical scheme.)
It is likely that there will be room for top-up cover to also provide for "nice-to-haves" not included in the NHI benefit package, says Kruger. An example of this could be orthodontics.
4. Change your medical mindset
The NHI will bring a much larger focus on preventative and primary medical care with greater use of clinics, midwives and GPs, while specialists will only be accessed through a strict referral system.
This will force many medical scheme members, who currently think nothing of visits to specialists like paediatricians or gynaecologists, to change their way of thinking about what really requires specialist attention.
If your current GP, specialist or dentist receives NHI accreditation to treat state patients, their workloads are expected to increase dramatically and this will have an impact on your waiting time for treatment.
The same is true for an NHI-accredited private hospital, which will have to make changes to handle increased workflow.
For example, those who consider themselves too posh to push may be in for a shock.
At 65%, SA private healthcare has one of the highest rates of caesarian sections in the world. The global average is below 20%.
The rocketing rate of C-sections in SA has been blamed on the package of minimum benefits medical schemes are required to provide by law, which includes the procedure.
However, the NHI looks set to change this, forcing pregnant women to use midwives as a first port of call, and giving access to specialists in very specific circumstances.
5. Take responsibility for your own health
It will be more important than ever to take care of yourself and avoid unnecessary health risks.
Some of the most common diseases in SA are hypertension, obesity and diabetes – all of which may be prevented, says Kruger.
Investing in lifestyle changes now may save you a lot of money later.
- Fin24.com
