Winners and losers of healthcare financing reform

George Cautherley, Convenor, Healthcare Policy Forum

The government is currently consulting the public on healthcare reform. Examining who stands to benefit and who will be hurt under the proposed healthcare financing reform options should be an important issue not to be overlooked. This is because in public policy-making, reasons have to be provided to justify the resulting distribution of benefits and burdens among different social groups under each and every reform option.

Since profit tax and salary tax increase is a non-option in the government's healthcare financing reform proposal, business will become the only sure winner as its tax burden will be lessened. Salaried taxpayers, as a group, will also gain as their tax burdens will also be lessened. However, depending on the reform option being considered, some in this group will gain more, some will gain less, and some will suffer a net loss. As regards non-taxpayers, they will become definite losers as they are destined to shoulder part of the future healthcare costs. Similar to the salaried taxpayers, depending on the reform option under consideration, some non-taxpayers will be hit more badly than others.

If out-of-pocket payments or voluntary health insurance are adopted, those who use healthcare or wish to purchase health insurance will have to pay more, disregarding whether they are taxpayers or not. Among the taxpayers, however, those earning higher salaries will be paying less as the amounts they pay for health services or insurance will be compensated for by concomitant tax reductions. For the non-taxpayers, since the healthcare needs of the very low income group will very likely continue to be subsidized, it is those at middle-low income levels who will be hurt the most as the less one earns, the higher the proportion of income going to out-of-pocket payments or insurance premiums.

If mandatory health insurance is adopted, both taxpayers and non-taxpayers will be required to take out health insurance and pay the same level of premium. Under this option, as under the two options discussed above and for the same reasons, higher-income taxpayers will be the major beneficiaries while the middle-low-income non-taxpayers will be hurt most. If social health insurance or medical saving accounts or personal healthcare reserve is adopted, wage-earners above a certain income level will be required to contribute a certain percentage of their monthly salaries to their health accounts or as social healthcare insurance premiums. The maximum amount to be contributed will most likely be capped at a certain income level. If contribution is capped, then all three options will benefit high-income taxpayers more than their low- income counterparts. This is because for the taxpayers with income above the capped level, the more they earn, the less the proportion of their income will be going to their contributions while the more they will gain through concomitant tax reductions. Compared to the taxpayers, non-taxpayers who are required to contribute will suffer a net loss because they will not be able to enjoy any tax relief.

In brief, while the government's healthcare financing reform proposal may appear complex, in terms of who gains and who loses, the picture is quite transparent and simple: business will gain; high-income taxpayers will gain more than low-income taxpayers; non-taxpayers at relatively higher income levels will lose. The reform proposal as a whole in fact requires middle-low-income groups to shoulder a disproportionate burden for healthcare costs. In effect, the government's proposal is a proposal to transfer future healthcare cost burdens from business and high-income groups to middle-low-income groups.

Given that the richest 10% of households in Hong Kong earns 41% of total household income while corresponding figures in other advanced countries such as Germany and the Netherlands are 22.1% and 22.9% respectively, and that 44% of Hong Kong's total healthcare expenditure already comes from private means while corresponding figures in OECD countries average 30%, the government owes society an explanation as to why the distribution of benefits and burdens in its healthcare financing reform proposal is morally acceptable. As it stands, the government's proposal seems to be saying that "for whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath". If this is the case, we argue that it is morally unacceptable.

An abridged Chinese version of this article was published in Ming Pao on 12 May 2008 (below).

醫療融資改革建議：誰得？誰失？

高德禮（George Cautherley），醫療政策論壇召集人

就政府的醫療融資改革建議，我們認為分析其將令「誰得」和「誰失」是一項重要的公共政策議程，因為政府有責任為這「利益」和「負擔」的分配作出合理和充分的解釋。

由於建議不考慮增加利得稅和薪俸稅，因此商界將必然得益，因為他們的利得稅稅務負擔將減少。薪俸稅納稅人整體而言也會得益，因為他們的稅務負擔同樣會減輕。但就個別薪俸稅納稅人而言，則視乎個別的改革方案，部分獲益較多，部分獲益較少，部分更會有所「失」。就非納稅人整體而言，他們必會受損，因為他們將承擔更大的醫療開支；同樣地，視乎個別的改革方案，部分非納稅人的所「失」會較大。

假如「用者自付」或「自願私人醫療保險」這兩方案被採納，則無論是否薪俸稅納稅人，只要使用醫療服務或購買私人醫療保險，就得付出更多。但在薪俸稅納稅人當中，高收入人士多付的則比低收入的少，因為他們的稅務寬減將足以補償或甚至高於他們的額外醫療負擔。另一方面，在非納稅人當中，由於最低收入的一群的醫療開支將會繼續得到資助，因此中低收入的非納稅人的「失」將會最大，因為收入愈低，醫療費用或保險保費佔收入的比率就愈高。

假如「強制私人醫療保險」方案被採納，則無論是否薪俸稅納稅人，屆時都要購買私人醫療保險並繳付相若的保費。如前述的兩個方案及基於同樣理由，在這方案下，高收入納稅人的「得」將會最大，而中低收入非納稅人的「失」將會最大。

假如「社會醫療保障 」或「醫療儲蓄戶口」或「個人健康保險儲備」的方案被採納，工資高於某水平的在職人士須將其每月工資的某個百分率存入個人戶口或用作繳付社會醫療保障保費。一般而言，這3個方案的供款額都會設有上限，即收入高於某設定水平的人士只需按設定水平的供款額供款。例如，如果入息上限為2萬元，而供款率為3% （供款額為600元），則月入高於2萬元者也只需供款600元。假如供款設有上限，那麼這3個方案給予高收入納稅人的好處將高於低收入納稅人，因為對於收入高於入息上限水平的人士而言，收入愈高，供款佔收入的比率就愈低；另一方面，他們稅務寬減的得益亦愈高。相對於納稅人，由於非納稅人將不會享受到任何稅務寬減，他們將會是這3個方案的最大受害者。

政府的醫療融資改革方案在技術層面看似非常複雜，但從「誰得」和「誰失」的角度看，方案其實相當簡單：商界將得益；高收入的納稅人得益將多於低收入的納稅人；較高收入的非納稅人將受到損害。政府的建議其實是將醫療開支的承擔從商界及高收入階層轉移到中低收入的人士身上。

根據統計數字，最高收入的一成香港住戶已賺取了全港住戶總收入的41%；在其他發達國家如德國和荷蘭，數字只為22.1%和22.9%。同時，香港市民現已負擔很大部分自己的醫療開支，約佔整體醫療開支的44%，相比下，OECD國家的平均則只為30%。在這背景下，政府實欠社會一個解釋，為何它建議的「利益」和「負擔」的分配在道德上是可接受的。政府似乎在提倡：「凡有的，還要加給他，叫他有餘；凡沒有的，連他僅有的，也要奪去。」如果是這樣的話，我們認為道德上是不能容許的。

文章刋登於2008年5月12日明報

The above does not necessarily represent the views of the Foundation. Reproduction of the article requires written permission from the author.