The National Health Insurance (NHI) will further widen the inequality gap, put even more pressure on the already overburdened taxpayer and lead to an outflow of medical expertise should it be implemented. AfriForum has detailed these and other consequences of the NHI in a new research report.

In its report, the organisation details, among other things, the ideological basis of the NHI, the place it occupies in the ANC’s National Democratic Revolution (NDR), the economic consequences of the centralization of health financing and the vagueness in the bill itself. Furthermore, the report provides an overview of centralized health systems in a number of other countries and how they compare or contrast with the economic and policy environment in South Africa.

One of the biggest issues with the NHI Bill is its funding. According to the report, four possible sources of income are currently being investigated that will have a negative impact on taxpayers – including payroll tax. This option entails that the government will require employers to recover a portion of their employees’ salaries which will then be remitted to the government – this on top of the deductions that are already recovered from employees’ salaries. South Africa’s marginal income tax is already higher than that of most other countries such as Canada, the USA and Namibia. Although this is the same as Australia, Switzerland and South Korea’s marginal income tax, South Africa has little in terms of service delivery to show for it.

The research finds in almost all the areas of investigation that NHI will be harmful to the economy and negative for the well-being of most South Africans and concludes that the bill should be rejected by parliament and opposed by the health sector.

According to Louis Boshoff, Campaign Officer at AfriForum, this report appears at a critical time where the parliamentary battle over the NHI Bill rages on and many misconceptions about it are circulating. “NHI is easily summarized incorrectly with slogans such as ‘free health care for all’, but the report takes a step back to obtain a more sober and objective picture, namely that the policy is expensive, unmotivated and unworkable,” says Boshoff.

Report by AfriForum