Earlier this month, the findings of the commission investigation into private healthcare were presented. The commission’s chairman, Sandile Ngcobo, found that private hospital groups had little competition between each other, so they were all thriving individually and charging exorbitant rates. In light of these findings, Health Minister Aaron Motsoaledi has proposed a National Health Insurance (NHI) scheme. But will this option save taxpayers money?
The Solidarity Research Institute investigated the NHI scheme and found that it will cost R357 billion along with a deficit of R210 billion. These numbers are much higher than the R259 billion Aaron Motsoaledi had estimated himself. The major concern regarding the cost of the scheme is that the majority of the funding will come from taxpayers.
Solidarity researcher Morné Malan has said that, in order for the government to fund the NHI scheme, VAT would need to be doubled. He said, “It is very difficult to determine from where the additional money to fund the NHI will come. It will take as much as 70% of personal income tax, or even as much as 99% of the income through value-added tax (VAT) to provide for the deficit. VAT will effectively have to be doubled.”
By: Mikayla Tetreault, Staff Writer