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National Health Act, 2003 (Act No. 61 of 2003)


National Health Insurance Policy towards Universal Health Coverage

Chapter 7 : Financing of NHI

7.4 Raising Revenue to Finance NHI

7.4.1 Economic growth and financing public health expenditure


212. The implementation of NHI will result in growth in public care health financing. The share of public expenditure on health will also be affected by restructuring of medical scheme arrangements in response to the services covered by the NHI Fund. Over the medium to long term, a moderate rise in the share of health services in GDP is possible – many countries have exhibited a rise in the ratio of health expenditure to GDP over the past century.


213. Mobilisation of fiscal resources as a result of economic growth need not require significant changes in the tax structure. Raising revenue associated with a shift from private spending to public health expenditure requires careful planning. Within the income accounts of households, this means a declining burden of medical scheme contributions, offset by a rise in general tax allocations to be directed towards NHI. However, the impact on individuals and families will vary, depending on details of NHI design, and depending also on household choices or behaviour. The transition is easier to manage if GDP growth is more rapid, so that tax changes can be introduced without unduly impacting on household’s disposable income.