National Health Insurance (NHI) contributions will be mandatory for all those earning above a certain threshold, according to the government’s recently released Green Paper on the scheme. However, one of the main concerns of the healthcare industry is that the document still lacks clarity on certain key issues such as the earnings threshold, the level of contributions and what treatments will be covered.
According to Clayton Samsodien, Managing Director of Genesis Capital’s healthcare subsidiary – Genesis Healthcare Consultants – while further clarity is needed on the threshold at which one would need to start paying, it may be pitched at the same level at which people begin paying tax, currently at about R4 979. “I would imagine anyone earning over the tax threshold would also have to contribute to NHI. This, together with the reduction of the rebate of medical scheme contributions, is likely to cause an uproar in the middle income range of earners.”
However, Samsodien says this will still largely depend on the scale of contributions expected from the public. “If contributions to NHI by employers and scheme members are pitched at a relatively low level, say R300, then it is certainly possible that we will see these people contribute to NHI as well as paying for top-up cover from private schemes. However, if the contribution to NHI is much higher, say R1 800, we are likely to see a huge exodus from private healthcare as people will not be able to afford to make both contributions.
He says, however, that he welcomes the news that the government is willing to leave the option in the hands of the customer with consumers still able to purchase private medical cover and schemes choosing whether or not to contract with the state.
Samsodien says the fact that the government intends to run a pilot project from April next year should also help to provide further clarity on exactly how NHI will work. “We support the fact that NHI will be phased in over a period of time, currently expected to be around 14 years, as well as the three month period for comment on the proposals. I think everyone in the industry, from the regulator to the Board of Healthcare Funders, welcome the step towards universal healthcare for all South Africans.”
“We do also believe that it is affordable if the state facilities are improved. Medical schemes are already using state facilities for chronic illnesses and some hospital procedures. As a result, if these facilities are improved, it would have a dramatic impact on medical schemes and private healthcare.”
He cautions, however, that the NHI facilities will need to be thoroughly tested before the scheme can be comprehensively introduced. “The Green Paper also noted that a body will be established to monitor the standard of these facilities, all of which will first need to be accredited before they can contract to NHI, which gives us some peace of mind that a certain standard will be kept in these facilities.”