National Health Insurance
Uncertainty in Long-term Demographic Projections
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The cost curves by age and gender above can be applied to the expected age and gender structures of the population in order to determine expected total cost for a given year.
In Policy Brief 1 it was strongly recommended that all costing work on National Health Insurance be done using the ASSA2003 provincial model and that the costings be updated when a revision to the model is released (perhaps by the end of 2009). The expected aging of the population of the South African population is significant over the period shown (to 2025) and thus NHI costings need to be done not only for the current period but also into the future. The degree of uncertainty in demographic projections needs to be borne in mind in this work.
The ASSA model uses the cohort component projection method and the results are calibrated to available data as it emerges. The key elements for this approach are given below with some comments about the differences between provinces:
- The existing population by age, gender and ethnicity from a “good” Census or adjusted where the Census is weak. The model is calibrated to the Census points from 1991, 1996 and 2001, taking into account the limitations of each. The next Census is planned for 2011.
- Fertility rates to project births: the Western Cape and Gauteng have lower expected total fertility rates than other provinces. This has obvious implications for obstetrics and neo-natal facilities.
- Mortality rates to project deaths: these are set by ethnic group. The Western Cape has a very different ethnic structure to other provinces with predominantly so-called Coloured lives while KwaZulu-Natal has the largest Indian population.
- HIV incidence and prevalence: The HIV incidence (new infections) for the Western Cape is projected to peak at a much lower level than for the country as a whole. The peak is also later than for most of the provinces. The HIV epidemic is the highest and most advanced in KwaZulu-Natal.
- The effect of HIV on both mortality and fertility; and
- Net immigration (result of immigration in and emigration out)
Prof Dorrington, in teaching population projection6, states that “As a general rule, nationally, the greatest uncertainty arises from fertility, followed (over the longer term) by mortality, and then migration. As a general rule, the smaller the unit (province, district, city, town) the more significant (and the less certain) is migration.”
He argues that “migration is most difficult to project: often impossible to record and difficult to estimate in future”. International migration is usually low but not in South Africa. Internally, work-seekers move to provinces with better employment opportunities but the families are sometimes left in the province of origin. This may lead to a reversal at later ages as retired people return to the province of origin. In projecting the future population, demographers usually assume the current level of migration for the short term or a slow trend towards zero over time. Immigration is also sometimes used as to balance a model to surveys of the population.
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