Op-Ed: S.A’s NHI – Is it necessary or appropriate for government to provide “free healthcare for all”?

PUBLISHED: Tue, 15 Aug 2017 13:33:30 GMT

By Jasson Urbach

“It’s déjà vu all over again,” as the late Yogi Berra might have said had he read the latest iteration of the national health insurance (NHI) policy paper. We are no closer to understanding critical details, such as how much the scheme will cost and where the money to pay for it will come from.

The costing figures presented in the latest iteration are copied verbatim (amongst other sections) from the 2015 White Paper. Despite economic alarm bells ringing throughout the economy, the government is going ahead with the scheme in an increasingly authoritarian attempt to limit our civil liberties and freedoms.

Those who can pay for their own healthcare should be allowed to do so

As I have argued previously and will continue to do so, in these dire financial circumstances, it is neither necessary nor appropriate for the government to provide “free healthcare for all”. Those who can pay for their own healthcare and, generally, do not rely on government provided service, must be allowed to continue to do so. Government’s role should be to fund the healthcare needs of only the poorest and most vulnerable members of society.

The proposed mandatory payments into the central NHI fund will crowd out private insurance. Cash-strapped individuals will no longer be able to afford voluntary private-insurance premiums when burdened with a mandatory NHI payment as well. Those unable to pay both premiums will be forced to burden the already overstretched public health service.

While the rich can hop on a plane and seek medical care anywhere they please, the poor and middle-class will be unable to escape the vagaries of the government-controlled system.

NHI will increase inequalities in healthcare

NHI will perversely increase the inequalities in healthcare, concentrating power in the hands of state officials and leaving no room for private medical schemes. Taxpayers could well fund healthcare for those who cannot afford it, but why interfere with the arrangements of those who can afford to fund their own healthcare?

Whether directly or indirectly, the government would control the availability, financing, and delivery of healthcare — the choice would no longer be ours to make. Compulsory NHI funding would serve government’s interests, not our own.

South African labour should be fuming since NHI necessitates an increase in the taxes levied on an already overtaxed population. The proposed payroll tax is a tax on labour. Workers will bear the cost, either through lower pay or job losses. This will leave us with less money for savings and investment, and thus the NHI will usher in even slower economic growth and less job creation, again hurting the poor. South Africa’s currently 9.3 million unemployed will have no hope of entering the job market.

No concern about the quality or price of healthcare

South Africans need to exercise real personal choice in choosing private insurance arrangements that best meet their individual needs – not a one-size-fits-all policy that will be determined and dictated by a nameless and faceless bureaucrat sitting in Pretoria.

Increased competition would force the private medical insurance sector and private providers of healthcare to compete directly for money by providing value and choice. The government has no such incentive – clearly, it is not concerned about the price or quality of healthcare. Personal ownership of healthcare would help control costs and guarantee better quality, and eliminate the need to depend on government.

South Africans fought hard for their freedoms from an overbearing state. Allowing the government to take over that most personal aspect of our lives – our healthcare – would undo these hard-won gains.

History has demonstrated that once a law is enacted, it is very difficult to repeal. The public sector is in shambles. We should not be trying to expand and emulate the failed policies that led to this situation. The government should be concentrating scarce taxpayer resources on the poor and destitute, and allowing the private healthcare sector to grow, innovate and expand. Such a healthcare model would not only be good for South Africa’s financial health, but would lead to better health outcomes for the poor, which is surely what we all want.

Jasson Urbach is Free Market Foundation Director & Head of the FMF’s Health Policy Unit

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