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Challenges in Funding South Africa's National Health Insurance Amid Budget Cuts
Time to read: 01:32
Published: 17 March 2025
In recent years, government spending on healthcare in South Africa has significantly decreased, hindering the progress of the National Health Insurance (NHI) plan. Data from The Outlier shows that while health was the second-largest share of the budget in 2017, by 2025, it had dropped to fourth place.
A large portion of the budget is now dedicated to servicing the national debt, with R1.1 billion a day allocated for debt repayments in the 2025/26 fiscal year. In comparison, the health budget only saw a 7.8% increase from the previous year, falling behind spending on debt servicing, social protection, and basic education. In our previous story, we reported that a substantial portion of the health budget is consumed by salaries, contributing to the loss of nearly 9,000 health workers due to insufficient funds.
Finance Minister Enoch Godongwana and Health Minister Dr Aaron Motsoaledi have expressed concerns over the financial constraints limiting the hiring of more healthcare professionals, particularly in light of the country’s severe doctor shortage. These fiscal challenges are detrimental to the NHI’s objectives, which aim to provide universal healthcare coverage for all South Africans.
However, critics point out the lack of a clear funding model for the NHI, with costs potentially exceeding government estimates.
While the Department of Health estimates the annual cost at around R200 billion, this figure is seen as overly conservative. The true cost of the NHI, especially if the quality of care matches that of the private sector, could exceed R1 trillion annually. This discrepancy underscores the difficulties in ensuring adequate funding to cover the healthcare needs of all South Africans while phasing out private medical aid schemes, which would also be required to contribute. The challenge lies in reconciling the need for high-quality care and the limited resources available, raising concerns about the sustainability and fairness of the NHI system.
This article was compiled with information obtained from various sources including:
17 March 2025 | The Daily Investor | Bad news about National Health Insurance in South Africa
The Outliier - Various
Access the News Archive
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