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Piggy bank

Medical Schemes predicted to lose up to 2 million members after Tax Cut

The National Health Insurance (NHI) is a plan to improve public health care so that everyone receives the medical care that they need without being faced with heavy expenses. At least this is what the White Paper which was released in June 2017 proposes. There are a number of concerns though, especially from the private medical care industry, surrounding the implementation and long-term effects of such a venture.

The latest topic surrounding the issues relating to NHI, which came from Health Minister Motsoaledi himself, warned that R20 billion in annual medical aid tax credits will likely be cut to fund NHI.

Affinity Health, as a medical insurance, is not tax deductible, but this cut could potentially move about 2 million people off private cover entirely according to Econex, an economic consultancy.

The White paper continues: “A key step in leading to this change is that the State will have to identify all the funding for medical scheme contribution subsidies and tax credits paid to various medical schemes (such as the Government Employees Medical Scheme‚ the Police Medical Scheme‚ Parliamentary Medical Scheme‚ Municipal Workers Union Medical Scheme‚ State entity medical schemes e.g. Transmed as well as various private medical schemes to which State employees belong) and reallocate these funds towards the funding required for NHI.”

What the NHI will accomplish at this point is up for debate, and how it will accomplish these ideals has yet to convince everyone. Currently it seems that there will be a transition period to properly set up the infrastructure required to offer free medical cover to all South Africans.

Affinity Health, continues to offer its services and will always inform members well in advance of any changes, whether legislative or otherwise.



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