CAPE TOWN: The latest budget speech tabled for 2018 came with many of the expected tax hikes and budgetary changed – but one expected change did not make the cut, much to the relief of almost nine million South Africans on medical aids in the country.
Many analysts expected the budget to do away with medical aid tax credits, which would have seen millions of South Africans losing out on an annual tax rebate, softened the blow of high monthly premiums to subscribe to private healthcare plans.
While these tax credits are safe for now, in the longer term, their sustainability is still in question – especially as the government looks set on its National Health Insurance plans, and actively seeks methods to finance them.
Analysts have warned that the government’s current plans for the NHI – and the subsequent restructuring of medical aids and how they function in South Africa – could see hundreds of thousands, if not millions of people lose access to quality private healthcare.
One caveat that did slip through the budget was that, even though medical aid subscribers will still get their rebate, it will be capped at R310 per policy holder. On average, this translates to about a 2.3% increase in the receivable rebate.
Analysts have argued that any increase is better than having the rebate removed entirely – but at the 2018 rate, this falls far below the 5% to 6% increases seen in previous years, and even further below the increase in medical aid premiums which ranged between 7% and 10% for the year.
