Fin24 reports that there is not yet any clarity on how much people will pay to the proposed National Health Insurance (NHI) scheme and how it will be funded.

According to deputy director-general in the health department Nicholas Crisp, the lack of clarity was intentional as the government had been advised by the World Health Organisation not to state the costs upfront. Said Crisp: “We have been advised repeatedly that we should not go the route of costing anything … What you do is you say that in a country such as SA, it is reasonable to spend between 7% and 8% of GDP on healthcare… and then you push the prices (of the goods and services you buy) down. That is exactly why we need one system. For example, when we buy pharmaceuticals in the public sector, we get them sometimes for one-tenth of what you pay in the private sector. Imagine if we were all getting those prices.” But, the tax increases required to generate at least R470bn a year (and more likely R700bn a year by 2026) will be high, according to the Insttiute of Race Relations. The Treasury warned in its October 2019 medium-term budget policy statement that NHI costs were “no longer affordable”, given the country’s macroeconomic and fiscal outlook at the time. This echoed an earlier warning by the Davis tax committee, which stated in 2017 that the NHI was “unlikely to be sustainable” without faster economic growth, which has not transpired and was unlikely to be achieved.

• Based on reports at Fin24 (subscriber access only) and BusinessLive

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