The National Health Insurance Bill: a critical review within the South African development context.

Abstract

This paper aims to provide a critical review of the proposed National Health Insurance Bill in South Africa with reference to the finance mechanisms and implications within the development context. This starts with a brief analysis of health coverage, looking at the international and local context and describes the development benefits of the NHI. The paper reviews the funding mechanisms with particular reference to the tax incidence of the different types of taxes that could be used to raise funds for the NHI. Fiscal policy implications of the proposed health care provision changes are also discussed, and the proposed NHI Fund evaluated, focusing on the impact on the achievement of a performance-based budgeting system. The paper concludes that the increase of income and consumption-based taxes could result in loss of welfare to society, as labour is discouraged from working and the poor are further disadvantaged through increases in taxes such as value-added tax.