The liberation of South Africa (SA) into an independent and democratic nation in 1994 was accompanied by drastic measures to amend persistent disparities especially those among different races. In this notion, many areas, healthcare were prioritised as one such important sector. Currently under the rule of the African National Congress (ANC) party, the South African government has recently published the National Health Insurance (NHI) Green Paper. This essay will discuss the economic incidence of implementing the NHI. Analyses of the financing and benefit incidences will be made for both the current health system and the newly proposed NHI. Finally, a plausible conclusion will be made based on the analysis of the analysis of both the current health system and the proposed NHI.
2. Analysis of Current Health System in South Africa
It is conventional wisdom that government’s stance is always on identifying particular pertinent fiscal issues which they are obliged to address and most often than necessary, they must provide solutions to. With this in mind, let us take a look at the current standing of the South African health system. In order to achieve a better understanding, a brief analysis will be made on the economic incidence which consists of two major areas, that is financing and benefit incidences respectively. The two aspects are scrutinised further below.
2.1. Analysis of the financing incidence of the current health system
The financing incidence examines which socio-economic groups bear what burden of funding of health services. Currently, the South African healthcare system is financed majorly by means of taxation. The main tax sources are personal income tax and corporate tax which constitute approx...
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... stands to gain the most. To conclude, inasmuch as the above research and the findings thereof have been derived, no conclusive argument can be made as to the extent of economic incidence on both government and the entire South African population. The fact that government has not yet committed itself to the NHI as details of the scheme, its fiscal and practical viability thereof are unknown according to Black et al (2012: p.136) thus renders conclusions or viewpoints of this policy issue to be indefinite. Further analyses regarding the best financing mechanism, i.e. one that will minimise the overall burden especially to individuals in the lower quintile must be made. Scrutinizing the strategies of other countries whose economies are closely related to that of the South Africa, who have successfully implemented the NHI would be a rather idyllic and advantageous.
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