The Treasury is preparing a financing paper on the National Health Insurance (NHI), which is expected to give more detail on how much the scheme will cost and how it will be funded.
NHI is SA’s plan for achieving universal health coverage, and it is intended to provide services to everyone free at the point of care.
Since health minister Zweli Mkhize tabled the NHI bill in parliament two weeks ago, paving the way for the establishment of a central fund to purchase services on behalf of the population, there has been some scepticism on whether it is affordable, given the current constraints on the fiscus.
A memorandum attached to the bill suggests an extra R30bn would be required on top of the current R220bn health budget
to implement "the full set" of NHI interventions including scrapping user fees at hospitals, setting up the fund and expanding services by 2025.
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Higher shortfall
Estimates by the Treasury in the 2011 green and white papers on NHI, put the shortfall for the full NHI much higher than this, at between R72bn and R108bn in 2010 prices. A more up-to-date estimate conducted by the Treasury on a limited package of only 15 benefits is believed to put the shortfall at R30bn by 2025.
The Treasury has been silent in the public debate on NHI, with the exception of a statement by the Budget Council last Thursday in which it said that while it supported universal health coverage it had been decided that the finance minister Tito Mboweni would engage with Mkhize on the implementation of NHI.
The NHI also has immense implications for the provincial health departments, which receive the lion’s share of the R220bn health budget.
The bill includes a section on proposed funding sources for NHI, despite the fact that only the minister of finance has the power to introduce a money
bill in parliament and to levy new taxes.
The inclusion of the funding section in the bill has been a cause of contention between the department of health, the NHI war room in the presidency and the Treasury. Several individuals close to the process said that although the Treasury had asked the health department and the head of the war room, Olive Shisana, to remove this section from the bill, it was included in the final version, which Treasury officials did not see before it was tabled in parliament.
The bill says that the funding required to implement NHI must be obtained from four sources: existing tax revenue, including funds currently directed to the provincial health departments; scrapping medical scheme tax credits and reallocating this money to the NHI Fund; a payroll tax levied on both employer and employee; and a surcharge on personal income.
Mkhize’s spokesperson, Lwazi Manzi, said on Thursday that the Treasury had taken part in the discussion on the NHI on a continuous basis. "The memorandum attached to the bill was formulated with calculations from consultation with National Treasury," she said.
On Friday, the Treasury issued a brief statement in reply to questions from Business Day, saying: "The paper is ongoing work. Although only the minister of finance has the statutory powers to publish a money bill and propose what taxes/ sources of revenue will be utilised to fund NHI, the minister will continue to engage with the minister of health on the NHI.
"The finance section of the bill published contains a brief summary of some of the actuarial costing Treasury assisted the department with," it said.
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