NHI plan a bitter pill to swallow

NOW IS a time for cool heads as government and political parties speak of scrapping medical aid tax benefits.

In November, the DA launched its alternative plan for universal health care and proposed that medical aid contributions be no longer tax deductible.

The DA said the resources should rather be used to build better services in the public health sector and for those with medical aid to cross-subsidise those without.

At the launch of the National Health Insurance (NHI) policy document in Pretoria at the end of last month, Health Minister Aaron Motsoaledi proposed that government withdraw tax incentives to medical aid schemes in order to create a transitional NHI fund.

“The R20 billion tax credits ... we believe is unfair. That money must be taken away and we must establish an interim fund before the actual NHI comes into being,” he said.

This week the ANC, fresh out of its policy conference, supported the scrapping of medical aid tax credits as a means of funding the NHI.

A Medical Scheme Fees Tax Credit is a rebate which reduces the normal tax a person pays. It seeks to bring about greater fairness and help achieve greater equality in the treatment of medical expenses across all income groups.

The government promised to deliver NHI within 14 years when it published its green paper in August 2011, but progress has been slow. The plan has also been criticised as unaffordable, and based on unrealistic expectations of economic growth.

There has been widespread condemnation of suggestions for the removal of medical aid tax credits.

Opponents of Minister Motsoaledi’s recommendation say that removing the medical aid tax benefit is equivalent to increasing the nation’s tax bill. They argue that people will be paying more taxes after the scrapping of the medical aid deductions. This is fair comment.

There is also a measure of truth in the assertion by Mark Heywood of public interest law centre Section 27, that scrapping medical aid tax rebates could lead to the cost of private health care rising, whereas efforts should be put in place in improving health care by reducing the cost of private health care.

Who can disagree with Heywood when he says that other sources of funding the NHI without hurting the economy should be sought, such as eliminating corruption which, he estimates, costs the national economy R60 billion?

There is also much wisdom in economist Iraj Abedian’s claim that the implementation of NHI will be stymied unless the quality of service delivery at public health facilities is turned around.

Without significant improvements in the quality of health-care services at public facilities, there will be resistance to the implementation of NHI.

The debate around the NHI calls for rationality. The health of the nation is too weighty to be used as a political football.