South African NHI coming in 2019: Ramaphosa

According to Fin24 the ruling party aims at the National Health Insurance (NHI) achieving 100% coverage by 2025.

Ramaphosa announced that the program is set to begin its phased implementation in 2019.

The Davis Tax Committee in March of 2017 found that the plan will result in a 4% increase in payroll tax, and a 3% increase in VAT.

Ramaphosa however has said that the program will reduce costs as economies of scale come into play on medicines and equipment.

My Take

Overall, I think the NHI is a good idea.

For three years running my salary increases at my previous workplace went straight to Discovery Health. In fact I was earning less over time because of increases in medical aid costs, and I had a very basic hospital plan.

Talking to my colleagues this was a very common occurrence.

Discovery Health is sixth in medical aids on Hello Peter, and their average rating is 2.2.

None of the top 10 rise above 3 out of ten.

So I look at that cost, and it doesn’t strike me as particularly onerous. We’re paying through the nose for services we struggle to actually get.

Earlier this year Times LIVE covered the story of a man whose wife needed emergency surgery to get a brain tumour removed.

The couple had flown out to the UK to introduce their new baby to her family. Shortly after landing in London the couple had discovered that she had a brain tumour and needed surgery.

In consultation with doctors they found the risk of her dying or suffering a brain hemorrhage on the way back to get the tumour treated in South Africa was simply too high.

He turned to crowdfunding to raise the money needed, because their medical aid scheme was only willing to foot a portion of the bill because they wanted her to risk death or permanent brain damage in flight to get a cheaper operation in South Africa.

Aside from this general anger I have towards this particular industry there are benefits beyond the easily quantifiable from getting everyone in the country covered – herd immunity means we lose less productive days to sick leave, and we can reduce costs on healthcare overall.

America spends more than any other nation on its healthcare in part because of how it uses more medication than most other nations – because those other nations invest more in preventative care that prevents the chronic problems that lead to the use of those medications.

The upshot of this being that if they went with an NHI themselves, whatever higher taxes Americans paid would end up costing them less than their current private approach. I haven’t seen as much analysis of this in South Africa, but I don’t think we’d be all that different.

Cost thus isn’t the issue that gives me pause with the NHI in South Africa.

The issue that gives me pause is I look at the mess that has been made of all our other state-owned-enterprises.

When we talk about SAA, we talk about how its budget airline SA Express had pulled out of the air because the engines were exploding, when we talk about Eskom, we talk about the threat of load shedding, when we talk about the post office. we talk about how often they’re on strike and so it goes on.

We need some assurance that this won’t be a cadre operation, that those who run the scheme both know what they’re doing, and ensure that what they’re doing isn’t stealing from it.

We have serious trust issues with our government that could thoroughly undermine what would otherwise be good ideas, and the solution isn’t for us to magically get over those issues, it is to have a government that can demonstrate that it is trustworthy.

If our government cannot operate in a trustworthy manner, no matter how good the idea is, it will not work. I don’t want to be talking about NHI some time in 2026 and it is something negative, and so far I’ve noticed a pattern of not getting what I want from government.


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