Impact analysis of new healthcare insurance

At the time of its inception in 2009, the proposed National Health Insurance (NHI) policy was hailed as likely the most significant development in the South African healthcare sector.

The objective of the proposed NHI was to substantially improve health incomes in South Africa.

However, beside for the direct social impact that this would likely have on the South African population, the NHI would also directly and indirectly potentially impact on the labour market in the following ways: (i) raising labour taxes or instituting mandatory contributions would impact on wages and employment dynamics; (ii) receiving free health benefits would likely improve workers’ non-wage wealth which may impact labour participation decisions and (iii) to the extent that the NHI successfully improves health outcomes this could also improve worker productivity and therefore indirectly increase labour demand.

Assisting one of the largest healthcare service providers in South Africa, Genesis played a central role in the debate in modelling the fiscal implications of the policy and the likely spill over effects for the labour market.