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The incidence of health financing in South Africa: findings from a recent data set

Published online by Cambridge University Press:  19 July 2017

John E. Ataguba  and
Di McIntyre
John E. Ataguba*
Affiliation:
Health Economics Unit, School of Public Health & Family Medicine, University of Cape Town, Cape Town, South Africa
Di McIntyre
Affiliation:
Health Economics Unit, School of Public Health & Family Medicine, University of Cape Town, Cape Town, South Africa
*
*Correspondence to: John E. Ataguba, Health Economics Unit, School of Public Health & Family Medicine, University of Cape Town, 7925, Observatory, Cape Town, South Africa. Email: John.Ataguba@uct.ac.za
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Abstract

There is an international call for countries to ensure universal health coverage. This call has been embraced in South Africa (SA) in the form of a National Health Insurance (NHI). This is expected to be financed through general tax revenue with the possibility of additional earmarked taxes including a surcharge on personal income and/or a payroll tax for employers. Currently, health services are financed in SA through allocations from general tax revenue, direct out-of-pocket payments, and contributions to medical scheme. This paper uses the most recent data set to assess the progressivity of each health financing mechanism and overall financing system in SA. Applying standard and innovative methodologies for assessing progressivity, the study finds that general taxes and medical scheme contributions remain progressive, and direct out-of-pocket payments and indirect taxes are regressive. However, private health insurance contributions, across only the insured, are regressive. The policy implications of these findings are discussed in the context of the NHI.

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Health Economics, Policy and Law , Volume 13 , Issue 1 , January 2018 , pp. 68 - 91
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© Cambridge University Press 2017 

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