LIFEHC: 2,378 +1 (+0.04%)
S Africa puts initial universal healthcare cost at $17 bln
(Adds hospital association, analyst)
By Onke Ngcuka
PRETORIA, Aug 8 (Reuters) - South Africa published its draft
National Health Insurance (NHI) bill on Thursday, with one
senior official estimating universal healthcare for millions of
poorer citizens would cost about 256 billion rand ($16.89
billion) to implement by 2022.
The bill creating an NHI Fund paves the way for a
comprehensive overhaul of South Africa's health system that
would be one of the biggest policy changes since the ruling
African National Congress ended white minority rule in 1994.
The existing health system in Africa’s most industrialised
economy reflects broader racial and social inequalities that
persist more than two decades after apartheid ended.
Less than 20 percent of South Africa’s population of 58
million can afford private healthcare, while a majority of poor
blacks queue at understaffed state hospitals short of equipment.
Anban Pillay, deputy director general at the health
department, told reporters an initial Treasury estimate of 206
billion rand costs by 2022 was more likely to be 256 billion
rand by the time final numbers had been reviewed.
The bill proposes that the NHI Fund, with a board and chief
executive officer, also be funded from additional taxes.
"The day we have all been waiting for has arrived: today the
National Health Insurance Bill is being introduced in
parliament," said Health Minister Zweli Mkhize at the briefing,
adding that the pooling of existing public funds should help
The Hospital Association of South Africa (HASA), an industry
body which represents private hospital groups including Netcare
, Mediclinic and Life Healthcare,
welcomed the release of the bill.
"We are committed to, and supportive of, the core purpose of
the legislation, which is to ensure access to quality healthcare
for all South Africans," said HASA chairman Biren Valodia in a
The new bill is still to be debated in parliament with
public input. It is unclear how long the legislative process
will take, with the main opposition party Democratic Alliance
suggesting the NHI, which has been in the works for around a
decade, would strain the nation's coffers.
"The DA is convinced that instead of being a vehicle to
provide quality healthcare for all, this Bill will nationalise
healthcare ... and be an additional tax burden to already
financially-stretched South Africans," said Siviwe Gwarube, the
DA's shadow health minister, in a statement.
Successful implementation of NHI would be a boon for
President Cyril Ramaphosa following May's election the ANC won,
but its cost comes at a tricky time in a struggling economy.
South Africa's rand fell to touch an 11-month low on
Wednesday, rocked by deepening concerns about the outlook for
domestic growth with unemployment at its highest in over a
decade and the economy skirting recession.
New taxation options for the Fund include evaluating a
surcharge on income tax and small payroll-based taxes.
"There is no doubt that taxpayers will find the additional
tax burden a bitter pill to swallow," said Aneria Bouwer, a
partner and tax specialist at Bowmans law firm.
The NHI is due to be implemented in phases before full
operation by 2026. The government is looking to eventually shift
into the new Fund approximately 150 billion rand a year from
money earmarked for the provincial government sphere.
($1 = 15.1555 rand)
(Reporting by Onke Ngcuka and Wendell Roelf;
Editing by Andrew Cawthorne)
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