Making the people pay for NHI too

Fri, Nov 7th 2014, 09:29 PM

On January 1, 2015, value-added tax (VAT) is scheduled to begin in The Bahamas. The country is awaiting its impact. The cost of living will certainly go up. We don't know by how much, but the difference in the cost of goods and services will be noticeable.
The government is bringing the tax on-stream to close its large reoccurring deficit. The Bahamas needs more revenue to avoid further downgrades by the international ratings agencies.
The country, though, is not booming. Real GDP grew by 0.7 percent last year and unemployment is around 14 percent. There is hope that Baha Mar's opening in 2015 will fuel job creation and economic growth, but it is unclear by how much.
In this context, the government wants to implement National Health Insurance (NHI) to give "health coverage" to all Bahamians. During the last Perry Christie-led administration (2002-2007) it was estimated that NHI would cost $235 million.
Dr. Delon Brennen, chair of the government's steering committee on NHI, told The Nassau Guardian in March that initial findings suggest the cost of implementing NHI has increased significantly since it was first proposed. Then, the Progressive Liberal Party (PLP) planned to fund the scheme via a payroll tax. The law, though passed in Parliament, never came into effect. The current scheduled implementation date for NHI is January 2016.
Now another member of the government's steering committee is giving further details on NHI's cost.
"That's going to be a big figure. About 10 years ago, you were looking at $235 million. Well, I believe you can double that and add something to it. That's at least $500 million it will cost the government to get a national health plan going, something to work effectively," said John Pinder, president of the Bahamas Public Service Union (BPSU), in an interview with this newspaper.
Kenwood Kerr, CEO of Providence Advisors, spoke of his concerns over the scheme, given the other new taxes recently passed and ahead of the implementation of VAT, which will come at a rate of 7.5 percent.
"I'm looking at, essentially, how [National Health Insurance] will be paid for," he said.
Kerr cited other fundamental issues related to NHI, such as cost, effectiveness, access and administration.
"The other issue that businesses and other individuals will look at is the cost to them individually," he said.
"And that, however you look at it, equates to a tax. My position is, against a compendium of other newly-imposed taxes, another tax is being put on us in terms of National Health Insurance and it's the proverbial last straw that may break the camel's back, so to speak."
Kerr is right. Christie, who is the minister of finance, should know the pressures Bahamians are under. Many can't pay their electricity bills. Many can't pay their mortgages. This lack of capacity has caused serious problems for the Bahamas Electricity Corporation (BEC) and our commercial banks.
Where will Bahamians find the money to fund the prime minister's NHI dream? Christie has an altruistic objective: He wants all Bahamians to have health insurance. The problem is we can't afford the scheme he is proposing.
Christie should pull back from this NHI dream, considering that he is already taking from our pockets via VAT the little we have. Bahamians have no more to give to the state.

Click here to read more at The Nassau Guardian

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