GST – A health hazard

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Photo courtesy of wargamarhaen.blogspot.com

Is Malaysia set to go into a situation where only the wealthy can afford state of the art medical treatment while the poor are denied the basic human right to health, wonders Angeline Loh.

theSun news daily’s 12h March front page headline “Docs may sue” (over the imposition of the controversial Goods and Services Tax (GST) for private medical treatment, including consultation fees) set in motion a chain reaction.

Companies providing medical insurance are also affected by the private practitioners baulking at the GST, as premiums are set to rise due to increased medical costs, with GST adding to it. According to the report, private medical practitioners argue against being categorised as “outsourced services” for purposes of the GST, despite the costs ultimately being sustained by patients.

This state of affairs puts medical insurers in a dilemma, as insurers are the major conduits to private medicine, channelling clients to private hospitals and clinics on their panel lists. Health care in other countries, whether private or public, is exempt from GST.

For instance, a New Zealand Inland Revenue Tax summary states, “No health care tax, apart from a very low levy for New Zealand’s ‘accident compensation injury insurance scheme’”1. Other countries such as Australia, Canada, and Britain debate and consult long and hard before imposing any tax on health care.

Health should not be taxable in any government effort to make the basic human right to health care accessible to all, especially when the majority of the population seek treatment from government hospitals rather than private health care.

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Further, health insurance is a growing market for those who can afford to pay regular premiums even for minimal coverage, as a safety net for any unforeseen event involving injury, illness, disability or death. Employers also take out health insurance for employees, making up a portion of the medical insurance market.

Taxing health will not only impact insurers and insurance agents but is likely to cause crowding in public health services, affecting the quality of treatment dispensed by public hospitals and clinics. Private practitioners may see a reduction in patient numbers if consultation and treatment fees become too expensive for middle-income earners.

Employers may also cut back on medical insurance for employees, who will have to depend on Socso or withdraw savings from private bank accounts or from their EPF. It is hoped that Soscso (Perkeso) services will be efficient enough to cope with the potential increase in future compensation claims for work-related injuries and illnesses.

GST’s knock-on effect

Overwhelming, GST, affecting virtually every aspect of life from 1 April, is expected to put pressure on a large section of the lower-middle and low-income population who can’t afford private medicine or medical insurance premiums.

This may cause an overall deterioration in public health, due to non-communicable stress-related diseases, malnutrition and other poverty-related illnesses, leading to increased pressure on public health care and medical treatment. In short, GST could cause the public health care system to jam up through overcrowding. Are our public medical systems prepared for that?

Medical staff at public hospitals and clinics may be over-worked adding to possible deterioration in the quality of treatment, not to mention potential human error that could make things worse for patients, health care workers, and doctors.

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Worse, traditional medicine practices, herbalists and small traditional medicine suppliers, which have made traditional and alternative cures accessible and affordable to the general public for ages, are in danger of being closed down because of GST. It will hit lower-income patients who often seek traditional cures for many minor ailments, and health maintenance. This medical heritage would be obliterated by GST, which many small traders and small businesses find too expensive and incomprehensible to implement.

The Rakyat have sent a clear message to federal authorities that the majority of the population are not ready to take on the burden of GST, especially when there has been no proper preparation, education or comprehensive system in place. There has also been no gradual initiation of GST to allow its imposition to become familiar to taxpayers.

Moreover, the imposition of GST on most necessary goods and services used daily by the population regardless of economic capacity will only reduce the consumption of necessities to the bare affordable minimum, especially among low-income families. BR1M will not serve to make up for a lack of a just increase in wages or proper social security systems to aid those struggling to make ends meet.

It is a shame that the Minister of Health appears to have overlooked this aspect of GST, which will worsen the nation’s health situation, despite the current persistent dengue fever epidemic, which has yet to be brought under control.

Is Malaysia set to go into a situation of ultra capitalism where only the wealthy can afford health care and state of the art medical treatment, while the poor are denied the basic human right to health?

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