Healthcare Funders call on Godongwana to clarify future of medical tax credits in the mini-budget
As Finance Minister Enoch Godongwana prepares to deliver the Medium-Term Budget Policy Statement (MTBPS) on Wednesday afternoon, the Board of Healthcare Funders (BHF) has urged the National Treasury to clarify its position on the future of medical tax credits, warning that their removal could leave millions without affordable health coverage.
The call follows comments by Deputy Director-General in the Department of Health, Dr Nicholas Crisp, who told Parliament that the government was in discussions with the National Treasury to phase out medical tax credits as part of plans to fund the National Health Insurance (NHI).
The BHF said it had written to Treasury Director-General Duncan Pieterse last month, seeking clarification on these discussions, but has yet to receive a response.
According to the BHF, a presentation to Parliament by the Department of Health suggests that the government intends to eliminate the tax credits for all income groups by 2029 — before the NHI is fully operational.
The organisation warns that this would create affordability challenges and force many South Africans to abandon their medical schemes.
An independent analysis commissioned by the BHF shows that removing the credits could render membership unaffordable for between 430 000 and 690 000 lower-income scheme members, prompting many to downgrade or cancel their cover.
This, the organisation says, would further burden the already strained public healthcare system.
"Reform cannot mean removing existing protection for scheme beneficiaries, of which 67% come from previously disadvantaged groups, before an alternative is ready," said Dr Katlego Mothudi, Managing Director of the BHF.
"Any change to the tax credit system must be aligned to the readiness of the NHI and implemented in a way that preserves affordability for those who are already shouldering a portion of their own healthcare costs."
Dr Mothudi said it is crucial for Minister Godongwana to confirm that the premature withdrawal of medical scheme tax credits will not take place and to provide transparency on how the NHI will be funded.
While the BHF expressed full support for the goal of universal health coverage, it emphasised that it must be achieved through a “phased, transparent, and inclusive process” that strengthens both public and private healthcare systems.
"A sustainable path to UHC depends on leveraging both public and private sector strengths — not weakening either. Fiscal realism is essential," said Mothudi.
The BHF added that fiscal and health financing strategies must focus on protecting affordability, expanding access, and maintaining system sustainability rather than deepening inequality or eroding confidence in South Africa’s healthcare future.
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