NHI nightmare: R1 trillion required for full implementation
As President Ramaphosa contemplates a staggering R1 trillion National Health Insurance (NHI) bill, a dire scenario looms over citizens and the treasury. Freedom Foundation's comprehensive cost analysis reveals the proposal's unaffordability, suggesting, at best, slow and partial implementation. With statistician Garth Zietsman's meticulous study exposing the lack of detailed calculations, the NHI Bill's flaws, resembling the failed Eskom model, become evident. Freedom Foundation CEO Leon Louw argues for decriminalising genuine insurance, offering a more realistic and efficient solution to provide quality healthcare for all. The proposed payroll tax is dismissed as insufficient, raising doubts about the NHI's feasibility.
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R1tr bill for full implementation of NHI: Leon louw speaks
From the Freedom Foundation
President Ramaphosa has been asked by parliament to impose an unaffordable R1tr (one trillion rand) NHI bill on the nation. This is the conclusion of Freedom Foundation research*. It is the frightening prospect now sitting on the President's desk and a nightmare scenario for citizens and Treasury since NCOP passed the NHI Bill on 6 December, ignoring amendments and warnings proposed by thousands of stakeholders.
This NHI cost analysis shows conclusively that National Health Insurance (NHI) as proposed would be too costly to implement. At best, there might be slow, half-hearted and partial implementation.
Statistician Garth Zietsman, lead researcher and co-author of the Report said, "Until this study, there has been no published attempt at a comprehensive costing. Many estimates have been suggested, but there has been no detailed calculation. This is partly because no one knows what would constitute full, partial or incremental implementation. Since no one knows what NHI implies, my research is modelled on plausible scenarios and the conclusion is that "full" implementation, taking into account all possible elements of NHI, could cost R1tr."
Leon Louw, Freedom Foundation CEO, said, "The Bill does not propose healthcare 'insurance', but a financing and single-supplier mechanism resembling the failed Eskom model, to implement profoundly flawed and doomed healthcare policy. If genuine insurance were decriminalised, this would be a far better framework to provide quality healthcare for all, a goal on which all decent people agree. Paradoxically, it proposes the prohibition of insurance. Real insurance would be achieved if unambiguous private healthcare insurance were fully decriminalised. That would make healthcare more realistically affordable for government, better quality for all, especially the poor, and more expeditiously achieved. Under properly defined healthcare insurance, the government would require all people who can afford it to insure themselves, and subsidise private cover for those who cannot (on a means test) afford it.
A payroll tax has been proposed. Zietsman says, "That amounts to saying that there will never be NHI. Such taxes could raise no more than enough for minor improvements to the already existing universal healthcare system as opposed to anything remotely resembling what has been promised. No systematic study has been done on the substantial damage of such a tax, especially for the poor."
One of the substantial, yet unmentioned, NHI costs will be lost taxes from whatever parts of private healthcare are replaced, banned, curtailed, nationalised or government funded. This additional cost, which must be added to every estimate, is estimated at R57 billion.
Louw continued, "The Report's conclusions show that there is no plausible scenario under which NHI could happen. It would consume nearly half the annual Budget or a quarter of the entire economy (GDP). Lower figures that have been published are optimistic underestimates.
South Africa already has universal healthcare in that everyone is entitled to a limited range of government funded care. What is proposed is unclear, undefined and unknowable, including to the current policymakers. What is done in practice under NHI as proposed will be determined arbitrarily by the present and future unknown ministers".
Zietsman agrees, "This analysis addresses these and other core concerns. Real world 'healthcare' includes everything that ordinary people regard as caring for their health. The cost of comprehensively defined excellent healthcare as understood by civilians would substantially exceed the highest estimates so far".
Louw said, "The NHI Bill is not substantive law since what is to be done is not in it. That will, as stated in the Report, be decided arbitrarily to unspecified and unpredictable extents on unknowable dates, if ever. It is not possible to know from the Bill what would constitute partial, incremental, or full implementation, nor even what constitutes 'healthcare'; what it includes and excludes."
Therefore, this in-depth analysis considers everything that ordinary people regard as caring for their health.
When it suits them, government officials will tell us what is in and what is out, how and by whom it will be delivered, and thus how hundreds of billions, if not a trillion, might be raised or avoided.
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