Medical Services Levy

I am in full agreement that we need a re-introduction of the Medical Services Levy(MSL), my only concern is that it would be a “stealth” tax that could/would be used wherever Government decided .
In order for it to work as it should, the monies raised from the MSL would need be in addition to the current budget of the Health and Social Services Dept.

Mal Prior – Stanley



4 Responses to “Medical Services Levy”

  1. Dick Sawle Says:

    Hi Mal – the MSL in my view was a good system, but in order to avoid any confusions, I believe that when it was talked about re-introducing MSL, it was simply another tax (as you point out). I recall asking the Director of Health many years ago why it was that we as a country could not get insured in the same way as many large companies do. He never answered my question other than saying that it might be difficult. It could be impossible, but there is no reason why we should not at least try to have a national insurance scheme in place. I think people would be happy with that if they had to pay – knowing that the payments they made were part of a general insurance scheme.

    It could also be the case that this is a no hoper – I simply don’t know, but introducing another tax is not the answer, but a careful, considered approach as a nation to underwriters might be a possibility – I make no promises othr than to do what I can and let everyobe know the result.

  2. Mike Summers Says:

    I have no objection in principle to a scheme that enables prople to contribute to the cost of medical services, but it has to be very clearly thought through. When it was last proposed all that detailed thinking had not been done.

    Firstly – what will be the possible effects of introducing a levy (however done). It might encourage people to think clearly about medical expenditure, especially if the levy was for a proportion of the total cost – the more it costs the more we all pay. Alternatively it might encourage some to think that since they are contributing they want their bit of expenditure and a raft of additional services. Undoubtedly different people react in different ways, but what we urgently need is for consumers to act responsibly and for practitioners to spend where necessary as opposed to where desirable. Spending on health and social services already accounts for just under 20% of total FIG net operating expenditure.

    Secondly – how is it to be collected. The last proposal was for a tax on employers and employees. Whilst I can see a justification for collecting from employees, I can see none for collecting from employers. Even collecting from employees is not just straight forward; those choosing not to work will not pay. If it is %age based those who earn more will pay more however well and fit they are. If it is lump sum the lower paid are penalised.

    Thirdly – how is it to be applied. Money collected by FIG goes to the Consolidated fund, not to the collecting department. That is so that Government revenues are under the legitimate control of SFC, not the collecting department. Whilst it is possible to allocate monies collected for a specific purpose, does that motivate the recipient to be more careful and cautious, or take the view that there is guaranteed money so lets spend some more.

    Fourthly – the quantum. HMS spending is currently at £6.76 million pa. The whole of personal tax (at 21 & 26 % rates) amounts to £4.46 million. So to collecy a meaningful amount would require a substantial increase to effective tax rates – because whichever way you dress it up it is a tax.

    So lets continue to discuss – it has merit, but it ain’t that simple !!

  3. Dick Sawle Says:

    Hi Mike…I agree…it is far from simple and my response was not intended to be a simple solution. I was doing little more than reflecting what a lot of people have told me they would prefer…i.e. a health care system in which they took a direct, ring-fenced part.

    I agree that how that is achieved is a complex problem. The green paper produced in March 2009 does outline the options, together with a very good summary of the advantages and disadvantages of various proposals.

    I recommend that anyone reading this blog reads that paper as there would be little point in summarising it here….I can send on by e-mail or it is freely available from FIG sources.

    The paper doies go into detail on the four main methods of funding such a scheme….direct payments, private health care insurance, social insurance and tax funded healthcare. It also outlines the implications for each as far as the FI are concerned.

    It did ask for responses but as far as I know, these have never been published or discussed, but I may be wrong on this last point of course.

    As you say…it is a worthy debate that needs to be had.

  4. Norman Besley-Clark Says:

    It requires the political will to do. Should be completed within a given time frame.If the Electorate so wish

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