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SA puts initial universal healthcare cost at R256bn

The NHI is due to be implemented in phases before full operation by 2026.

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 R256 billion ($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% 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 R206 billion costs by 2022 was more likely to be R256 billion 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 reduce costs.

‘Tax burden’

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.

Read: One currency is missing out on the EM rebound. You guessed it…

New taxation options for the Fund include evaluating a surcharge on income tax and small payroll-based taxes.

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 R150 billion a year from money earmarked for the provincial government sphere.

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They are smoking their socks. R150b a year to be funded from where … FROM the 16 taxpayers left in SA by 2026 .. hahahaha.

The numbers are truly mind boggling.

“New taxation options for the Fund include a surcharge on income tax.”

2.1 mil tax payers pay 80% of Income tax. That works out to R98k extra per middle/upper class taxpayer.. or extra R14k per person per year till 2026.

The only thing that adds up here are my rand shorts. Time to double down.

Don’t stress. Our forthcoming IMF rulers will never allow this communist madness.

bad news…we are far from a IMF bailout…and maybe they will be worse

There are only 2 problems with this NHI.

The first is where on earth is the money going to come from?

And the second is just as bad. Where the heck is the money going to go to.

Neither of these questions have answers you are remotely going to like

Navigator let me help you. Come from? From the 4% that pay tax. Simple.
what will it be used for? It will be used to line pockets, these turkeys are incapable of even starting a spaza shop, but devising ways to loot, they are the best.

It is heart warming to know they will never get it off the ground but what worries me is they will collect the money before they start anything….

In 1984 I worked with this minister. He was a good surgeon, teacher and general nice guy. I am sad to see he is way off the mark here, as is his party. This could be the terminal event in SA and they are totally unaware of what they are doing. Flabbergasted..

R256B! Eish there is soo much food to eat now! Zuma and his buddies (the ANC) are all smiling. The tenderpreneurs are smiling!
Everyone is gonna score big time…except the SA public. Man they are gonna rape that pile of stash.
Good thing I am planning to leave this mess for good.

How much the NHI was going top cost was always a major concern, but at least that has been cleared up.

R2 560 000 000.00 divided by 80 ANC NEC members, works out to R32 million per NEC member.

Definitely workable.

You are wrong. You mistakenly working on 2.56 bn, not 256 bn. You must be extremely optimistic if you think that they will only steal 1% of the money 🙂

My mathematical genius is instilled into me by a higher power than the laws of man and nature. I will fight you all the way to the Constitutional Court to prove my point.

I think the figures are much to low anyway. The R256 Billion will not even cover the mental health requirement. The whole ANC + 57% of the population has a serious need. A few others must still be added in as well.

And the 16 Taxpayers Safrican2 referred to above has just now become 15.

“while a majority of poor blacks queue at understaffed state hospitals short of equipment”

So all that will happen, once the NHI is implemented, is that these institutions will remain as is, perhaps even more broken, with a broader representation of the population queuing for medical services. Thus, as a taxpayer you will be fleeced and will have to fork out extra monies to circumnavigate the system.

Yes you are gonna queue! Right now they go there at 6am and they leave at 2pm! Go check Coronation hospital if you don’t believe me. That is nearly half a day waiting to see a doctor!

Multiply that by three for a more realistic cost.
Taxpayers will get back 1/100 of that in value.
The cadres will score big.
The economy will collapse.

If the ANC was not that corrupt and did not steal the trillions from the SOE’s then SA could have easily afforded universal healthcare at a cost of R256bn

Imagine how much of that can be stolen! What an opportunity. The ANC gangsters in Luthuli house must be busy planning custom made yachts, jets etc. Contracts, tenders etc. A feast of stealing for this despicable vermin.

And who will pay-the dumb salaried middle class taxpayer and small business owner( if any are left in 2026)

I don’t think they will touch the R256bn. They are preparing to dip into the 200 plus percent of overspend. Look at the track record. Medupi/Kusile, Gautrain, Arms Deal, ….. Need I go on?

Who cares? By 2026, the vast majority of the top income tax and corporate tax earners will have externalised all their wealth and mostly themselves. In any event, medicine will be decolonised and it doesn’t cost a lot to rub dirt into a septic wound or boil beetroot and cure AIDS, so all should work out for the masses, as they revert to their historical mean

Private doctors, who are now to become state employees, are also small business owners. They employ staff, rent rooms, buy equipment, stationery, rent printers, the list is endless. Collectively the private medical industry pay billions in VAT and income tax. All of which will fall away. Staff, from cleaners to caterers to security personnel, call center agents, brokers, will lose their jobs or become state employees. So the government plans to erode the tax base severely themselves and cause massive unemployment. The captains of industry will also not stay in a country where they will not even be able to buy proper medical care. More taxpayers out the door. The insanity of it all leaves one breathless.

Socialists have an abundance of ideas and a shortage of logic.

Well said. But here’s a spoiler alert. This is never going to happen.

South Africa goes down well before 2026.

All true and don’t forget that specialist doctors pay extremely high professional indemnity insurance. That is why the country has a shortage of obstetricians, for example.

My revered late FIL was a general surgeon who went into a state hospital to work in his senior years. He had a toilet seat loose in his car which he took with him to work …. not a single WC in the hospital had a toilet seat. A piffling example but you get the idea. The law of Unintended Consequences will kick in if this insanity is implemented. SA MDs are highly sought the world over, prized immigrants in the first world. There is a standing joke among Saffers here in Canada … if your car breaks down in Saskatchewan or Manitoba just ask where the doctor lives. When you ring the doorbell an Afrikaans speaking kid will open it and call you oom. In Canada they describe the Saffers as folks with strange accents and well behaved kids. The inevitable exodus of private sector physicians will become a torrent. The loss of human capital cannot be measured in money terms alone. SA is not going to replace people like these with refugees walking barefoot across the Limpopo. Oy vey.

It won’t just be a flood of private sector physicians, the tax-paying base who want to live through routine medical procedures will be joining them!

It’s not only the hospitals that don’t have toilet seats. I had to attend the local magistrates court in respect of a small claims court matter. It was quite a job to find a working toilet. Those that worked had no toilet paper and no seats.

There was a stink in the local paper about toilets in holding cells not working and people not being able to put up with the smell.

The ruling elite are too busy driving around in expensive tax payer funded vehicles to worry about the voting fodder.

How about controlling the population explosion created by “your rabid gimme club people”?

From News 24 article – NHI Bill: Citizens, refugees, inmates, ‘designated foreign nationals’ and all children to benefit.
I doubt the brain boxes who dreamed NHI up at this point in time have any grasp of the law of unintended consequences. Massive capital flight, less tax from fewer emancipated taxpayers and a severe tax revolt. Not to mention the hundreds of thousands of newly unemployed people who previously worked in the private healthcare space. But to expect anything different would be naive I suppose. Time to start packing. The writing is on the wall.

Typical crab mentality. If they can’t do it themselves, drag everyone else who can, down.

It’s not as if the current system is that great anyway. Getting fleeced by medical aids at 10% per annum in a 0 growth environment will stop working soon anyway. The US being case in point on how unaffordable private healthcare can become.

The plan has always been to use SA for medical until the only option is medical tourism, or move to a wealthier country that can afford universal healthcare.

The final nail in the coffin. Moving most money out of SA now

The next project after the NHI will be the streets paved with solid gold. On second thought, maybe that should be first since that is more realistic.

Is the 256 incremental to current cost of national and local government provided health?

That cannot be.

For scale, 256 is more than Eskom turnover. Yes it is a mere 20 times Eskom loss I know…

But if you work it back to R5000 per person per year it does not sound crazy.

I really don’t know what to say.
Generally, I am an optimist. But this … this breaks me.

How on earth can they think we can afford this, especially NOW?

How on earth do they think they can administer this?

How disconnected from reality can you be?

The short answer is: they don’t think about it at all. It’s all about how one feels.

The reality is that you need to look to the well-being of yourself and your family/friends now.

You’re at a similar point of realisation I was several years ago when I saw what was coming. I left.

Now you need to think what is actually within your power to do or change – if you get my drift.

I’m going to put it forward that the ANC will see full well that their policies are economically unviable, but they will never back down from it. It is their only selling point, that they promise their voters to take money from the productive minority and distribute along racial lines. Anything less is to betray over a hundred years of African Nationalist history, leading the party an existential crisis. They will willfully drive South Africa into the abyss and still be blaming Verwoerd or the IMF or WMC or whatever scapegoat they can find. And they will never admit the truth, which is that they are afraid of allowing their voters to mature into independence.

I have a sneaky suspicion that they know very well that it is unviable. But it sounds like a noble idea (to the rest of the world) so they believe it makes them look good to the limp wristed liberals out there. Added benefit number one is it buys them more votes – or maintains the flagging hopes of some. Finally a big project like this (like the Arms Deal etc) has hugh scope for consultants with built-in kick backs. Personal and party coffers love that. What’s not to like about this project?

What about food security.Is it not more important than medical security? Do the same to Spar, Shoprite and Checkers. Now we are stuffed. Eish

The Zuma/Ace/State Capture crowd are forcing CR to go through with NHI – otherwise they will use non-implementation of NHI as grounds for the removal of CR.

Out of spite the State Capturers are further crippling the country – adding weight to the treason charges against them.

The CR crowd might be string the State Capture crowd along on NHI – just as they did with the EFF on EWC.

At a certain level ANC politics is quite sophisticated and should not be taken literally.

The ANC have proven time and again they are incapable of running any enterprise. Now they want to embark on the most costly program since the Eskom expansion. The only certainty is that this is going to be a disaster. I am gatvol of my hard earned income being wasted by incompetent buffoons.

soon the minority that pays taxes, will have to get second jobs while the ANC creates the next hole into which money will just vanish. I’m really doubting that the ‘stuggle’ was about apartheid, I think it was about liberating us of our money. Cyril is spending so much time in court that the titanic and the iceberg are going to become good friends and very soon.

For the past 2 years I have worked in the Netherlands, where we have the “Zorg”, which is largely funded out of taxes – 27% of the budget goes to the “Zorg”, or EUR 80 billion (ZAR 1.2 tn) for a population of 16 million.

Now, I get there are exchange rate differences but how is SA with nearly 5 times the population of the Netherlands going to implement an equivalent system of free healthcare at 20% of the cost?

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