NHI: Tax rates for certain group could increase
The Health Funders Association (HFA) has launched a legal challenge against key parts of the National Health Insurance Act (NHI). Here’s why...
The National Health Insurance (NHI) scheme in its current form could have severe financial consequences for millions of South Africans, particularly those who are already paying for private medical cover.
According to recent data published by the Health Funders Association (HFA) in partnership with Genesis Analytics, the scheme could more than double personal income tax rates and lead to a significant loss of disposable income for medical aid members, without guaranteeing any improvement in healthcare outcomes.
The HFA, which represents medical schemes covering over half of all people on medical aid in South Africa, has launched a legal challenge against key parts of the NHI Act. The organisation supports the principle of universal healthcare but argues that the current version of the NHI is unaffordable, unworkable and unconstitutional.
Implementing the NHI as envisioned would require a 115% increase in personal income tax just to maintain the care that medical scheme members currently enjoy.
This would have a significant impact on working-class families, who would see their tax rates increase substantially. BusinessTech reports that medical scheme members would receive 43% less healthcare than they currently do, while paying 1.5 times more tax.
The proposed model offers no guarantee of improved outcomes, while restricting the mechanisms that currently drive quality and innovation in healthcare.
The NHI would also result in the loss of medical scheme tax credits. These tax credits are essential for many South Africans and assist in their ability to afford cover.
The HFA's legal action is not aimed at blocking reform but at ensuring that any national health initiative is grounded in sound constitutional principles, economic feasibility and respects individual choice.
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