National Health Insurance Input to the TAC COSATU

Need to restructure health system Poor outputs despite high spending by international standards Rapidly rising cost of medical aids Growth in private sector care leading to deeper inequalities and resentment

Government proposals Problems in health caused by underfunding: Inadequate contributions by those who could pay more “Dumping” Solution: All formal workers must join medical aids Government may establish a low-cost medical aid to help out Regulation of private providers to ensure efficiency

Concerns Agree on need to regulate private costs But basic premise of underfunding is wrong – Therefore unaffordable for the economy and individual workers Need to equalise funding, not increase it overall Does not address problems other than funding Management Skills development Conditions and career paths Privatisation of health seems unconstitutional

Concerns Focus on tertiary – but most workers want improvements in primary Virtually complete failure to include consumers – either employers or workers – in consultation, despite TOR

country groups: South Africa middle income low income high income Brazil Cuba Mauri- tius Tan- zania a. Figures for various years between 1995 and b c. under 0,05.Source:World Bank World Development Indicators Washington, D.C. USA. Health indicators

Cost to workers Minimum required benefits estimated at R200 per person per month, or around R800 to R1000 a family Even if workers only paid a fraction, would still be hugely expensive for many Contradiction between proposed income- based subsidy and requirement that take on more risks, especially as cost of minimum benefits are heavily related to age

For example: public service Punted as standard bearer for SHI Minimum employee contribution of R220/month, so employer contributes R440 20% of public servants earn around R2500/month Therefore increase in the cost of employment by 25% Given unemployment of 31%, this is ludicrous

Underfunding the public sector Effective cut in 1994, just when had to extend to whole population and respond to HIV Small but steady fall as percentage of total budget Result: drive people into the private sector – where costs have soared

The health budget Real amount (bns) % of total 25,000 26,000 27,000 28,000 29,000 30,000 31,000 32, /91999/ /12001/22002/32003/4 10.0% 10.5% 11.0% 11.5% 12.0% 12.5%

Principles for solution Basic healthcare, including primary care, must be accessible for all That means private care must remain an optional extra, NOT cradle-to-grave Must ensure reasonable budgets for public health – cannot ignore underfunding Must control private costs and ensure do not drain public sector Strengthen non-profit provision, which includes community, employment and union based

COSATU’s understanding of NHI Mix of public and private providers – but regulate to avoid duplication For covered conditions, single source of payment through non-profit fund Progressive levy with cross subsidisation plus general taxation Should not increase cost to those earning under R10 000

Contrast SHI and NHI SHI Increase medical-scheme funding Mixed providers Regulate private providers Does not directly increase public funding Much higher overall cost Does not remedy public- service management and HR problems NHI Single funding source through the state Same Same – using control of funding Ensure public sector has greater share in total No increase in overall cost Same, although improved funding should help