Lower earners could face marginal tax rates of 41%, sparking concern that NHI funding will punish the most vulnerable.
Research just released by the Health Funders Association (HFA) is the most-stark warning yet that the ANC’s push to implement the National Health Insurance (NHI) is not only doomed to failure, it is going to drag down our economy with it.
The HFA commissioned Genesis Analytics – an independent economic consultancy with experience in over 115 countries – to build a financial and economic model to test the viability of NHI and to compare the system with those in similar, middle-income countries.
The analysis was that, for NHI to fund a level of care equivalent to what medical scheme members now receive, personal income tax would have to increase by 2.2 times (a 115% increase in tax) from the current average rate of 21% to an average of 46% of income.
This would push marginal tax rates in the lowest income bracket from 18% to 41% and in the highest bracket from 45% to 68%.
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HFA estimated that were VAT used, it would have to increase from 15% to 36%.
Even a hybrid public-private system would require personal income tax to increase by 47%.
HFA is going to court to fight the proposals – and they aren’t the only ones.
This is simply financial madness.
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