Budget SpeechFinancial Planning

The Budget was good for the vaccine… on paper

CEO of medical scheme, Profmed, Craig Comrie lauded the Minister of Finance’s focus on funding and rolling out of the COVID-19 vaccine but remains wary of how this budget is allocated so that every cent is spent on vaccine procurement and distribution.

Following Comrie’s trepidation earlier this year where he decried the notion that medical schemes should bear the brunt of vaccination costs, the Profmed CEO was relieved by Wednesday’s budget speech.

“Medical scheme will pay their share and it seems as if treasury has provided sufficient budget for schemes not to have to cross subsidise vaccines for non-medical scheme members,” said Comrie.

While the 2021 Budget Review indicates that R9 Bill is set aside for vaccinations, add the fact that medical schemes will pay for the funding of vaccines this for their members estimated to be close to R4 Bill, this should mean that the all South Africans will get covered by the vaccine program. Comrie warns that it was not categorically stated that medical schemes won’t share any vaccination burden. “We must all contribute in some way to the success and speedy rollout of the program. The numbers provided in the National Budget Speech indicates that this funding is going to be channelled through provinces and we must make sure that these funds are all spent on vaccines procurement and distribution.”

While the medical schemes, the Council for Medical Schemes and Government continue to debate the issue, Profmed decided to seek the opinion of the people who actually own medical scheme funds.

In a mass member survey amongst its own members that elicited over 5,450 responses, it became clear that private medical aid members lean towards not having their medical scheme funds used to vaccinate uninsured South Africans. They also did not want additional taxes to be raised to fund vaccines as many were struggling with the economic effects experienced during the pandemic. However, most of them would voluntarily contribute to a separate fund for those who cannot afford vaccines.

The survey posed four simple questions with the following results:

1.     57.5% said they would not contribute to the funding of vaccines for persons who do not belong to a medical scheme

2.     68.5% would not agree to contribute a portion of your medical scheme reserves towards this funding.

3.     53% would prefer to voluntarily donate to a fund, similar to the Solidarity Fund for those who cannot afford vaccines

4.     92% says they would not want to pay more taxes to fund vaccines

As Comrie alluded to in his previous statement, he believes that setting up a voluntary fund instead forcing the issues through regulations would garner better results. However, he warned that medical schemes are legally restricted from taking money from members that isn’t used for the express purpose of their health.

Regardless, Comrie believes medical schemes already lift a great weight for the fiscus in paying for almost R200 Billion annually for healthcare cover for approximately 9 million people while contributing significant amount in taxes. “It’s just a pity that this year’s budget did little to recognise this fact. Perhaps the coming vaccine drive and rollout will provide more opportunities to create partnerships between the government and private sector to strengthen the healthcare.”







Related posts
Financial Planning

SA students not demoralised by the ‘doom and gloom’ about the country - PPS survey shows

Financial Planning

Household financial wellness at risk

Financial Planning

How to boost your willpower this Black Friday

Financial Planning

Steep decline for salaries in October 2021