The proposed Samoa National Provident Fund healthcare scheme looks highly questionable and a plan to grab onto more contributors’ money for SNPF use.

It also suggests a reduction in the final amount contributors would be entitled to.

The SNPF carried out the first consultation in Apia and will move to Savaii next weekend. Firstly, the lack of people at the consultation was worrying. Secondly, the scheme seems to be a shelved project resurrected by the chair Papalii Panoa Moala. The project did not succeed in the first place because the previous administration realised its negative impact on the contributors.

The successive chief executive officers were right not to pick up the healthcare scheme and push for it. There is more than one thing that is wrong with the proposed scheme. It seems as if the chair is hell-bent on giving a proposal he designed some credibility because he now holds a powerful role.

Three per cent will be deducted from employee contributions and three per cent from employers. This translates to a six per cent reduction in retirement savings. It is still unclear if the contributors will be returned the amount when they retire. If a person saves $100,000 under the current plan, once the compulsory healthcare scheme is introduced, the savings come down to $94,000.

Similarly, a person earning $100,000 a year will contribute more than a person earning $20,000 a year. In total, a person on a $100,000 salary will pay $6,000 annually and if he works for 30 years, he would have contributed $180,000. The person on the $20,000 annual salary would only contribute $1,200 annually and for 30 years of work, he would have only contributed $36,000. These are also the amounts that will not be reflected in their final savings.

It seems highly unfair that people earning more will be subjected to a bigger ‘tax’ on their contribution while the rollout would be equal and not clear if this would apply to private practitioners. When common sense is applied, a person’s medical bill unless he or she has a medical condition hardly reaches $6,000 a year. If that much is deducted, surely the individuals contributing at the higher end should have free medical.

The timing of the consultations is also questionable. Not enough time was given to the public to be aware of the consultations. The notices should have gone out at least two weeks before the consultations and the public should have had access to what is being proposed to have a better understanding.

Medical insurance provided by local insurers is cheaper compared to the SNPF healthcare scheme. The medical insurance schemes give the option of overseas treatment as well and at cheaper rates. The medical insurance schemes run in neighbouring Pacific islands are as cheap as $10 a week and cover medical and pharmaceutical bills.

A better option for the SNPF would be to partner with a local insurer if contributors want to be party to the medical scheme and make low payments through their contributions. It should be their choice and not compulsory.

A check with local insurers confirmed that insurance coverage for outpatients and medicine only is around $600 to $800 a year and up to $1,800 a year if the person wants overseas treatment included in his or her plan.

The proposed healthcare scheme is subject to cabinet approval. We urge the leader of the nation and the cabinet ministers to make the right decision and not approve this healthcare scheme. A scheme which looks frivolous and its only purpose is to take a bigger chunk of the contributors' money.

It is a retirement fund, leave it to that. Let it serve its purpose.