Report proves that SA simply does not have enough money for the NHI

15 August 2023

The national treasury will need an insane additional amount of R296 billion to finance the National Health Insurance (NHI).

The Solidarity Research Institute’s (SRI) latest report shows that the government simply does not have to ability to implement the planned NHI in South Africa.

On 12 June 2023 the NHI Bill was accepted by parliament, but there are barely any details of how it is supposed to work.

According to Theuns du Buisson, economic researcher of the SRI, very accurate assumptions can be made at this time about the total estimated costs for the NHI due to the clarity of the government’s plans to include the entire private health sector in the NHI.

“With the help of the national budget, we can make a realistic estimation of the cost. It is now clear that the NHI is absolutely unfeasible,” says Du Buisson.

There is, furthermore, very little information available on how the state is planning to fund the NHI. The preliminary indication from the state is that funds will be obtained by an income tax surcharge and payroll tax, therefore affecting anyone who earns an income – especially the low-income groups.

“For most salary earners, this means an increase of approximately 40% on your personal tax burden. If you are currently paying R5 000 to income tax, you will pay R7 000 in the future. Minimum wage employees will be hit the hardest because they are currently not paying any tax but will now be taxed at a rate of approximately 14%,” Du Buisson said.

“At present these workers already qualify for free healthcare in state hospitals. This gives us an indication of how absurd the NHI plans are.” The report clarifies how the NHI will only result in all of us paying a lot more – and that for poorer healthcare services.

“Indeed, there is a need for reform in the country’s healthcare sector. However, the focus must firstly be on training more doctors and secondly on improved quality of services in the public sector.

“Only then can the state begin to have input in the private medical sector.” Solidarity is convinced that the NHI Bill is financially simply unfeasible and that it should be repealed in its entirety.

Read the complete report here: https://solidariteit.co.za/wp-content/uploads/2023/08/National-Health-Insurance-14-Aug.pdf

Issued by Theuns du Buisson, Solidarity Research Institute: Researcher, 15 August 2023