Changes in Health Spending Rules to Take Effect in 2026
New regulations set to take effect next year could fundamentally reshape the way healthcare spending is structured.. The Fiscal Council Act introduces a binding limit on the National Health Fund (NFZ) within the framework of the Stabilizing Expenditure Rule (SRW). Due to these rules, the financial gap in the NFZ’s financial plan should no longer destabilize public finances. But in practice, this means that in order to allocate additional funds to healthcare from the state budget, government will need to either save an equivalent amount by cuts in other publicly funded areas or introduce measures to permanently increase public sector revenues through taxes and contributions.
This presents an unprecedented challenge for the healthcare financing system in light of new projections for 2025-2028, which indicate that the NFZ may require nearly a quarter of a trillion PLN from the state budget, potentially generating an annual public finance deficit of up to 1.9 percentage points of GDP.
The Institute of Public Finance (IFP) and the Federation of Polish Entrepreneurs (FPP) held a press conference on February 19, 2025 at Central House of Technology. A report titled “Healthcare Finances Under the Strict Oversight of the Excessive Deficit Procedure” was presented during the event. The policy paper was based on publicly available government documents and estimates of key future indicators related to healthcare financing.
The report also contained the consequences of Poland being placed under the Excessive Deficit Procedure by EU institutions and the inclusion of the NFZ under the SRW, as stipulated by the Fiscal Council Act. It followed up on a previous document from June of the previous year, prepared by IFP and FPP in collaboration with the National Institute of Public Health – NIH, concerning the NFZ financial gap for 2025-2027.
Baseline scenario and financial gap of the National Health Fund
The policy paper illustrates different prospects of Polish healthcare system. According to the baseline scenario, which assumes maintaining the current level of healthcare system efficiency, the financial gap in healthcare between 2025 and 2028 will reach 216.5 billion PLN. This figure could rise to 249 billion PLN in case further reductions in health insurance contributions for entrepreneurs are enacted, or if the government’s proposal related to the citizen-initiated amendment of the law on minimum healthcare spending is adopted.
This financial gap could contribute 0.9% to 1.9% of GDP annually to the public finance deficit.
Sławomir Dudek, President and Chief Economist of the Institute of Public Finance, states:
When we were preparing the report in June of last year, it seemed that the financial wall for the NFZ was approaching rapidly, but we thought we still had a little time. However, the execution of the 2024 budget shows that this wall is now just a millimeter away. Last year, the NFZ’s financial gap exceeded 30 billion PLN. Two-thirds of this gap was financed through cuts in other healthcare expenditures within the Ministry of Health, an increase in the budget deficit, and a hidden subsidy in the form of bonds that were not reflected in the official budget deficit. The remaining one-third of the gap will be covered from the NFZ’s reserve fund. Unfortunately, this “safety buffer” will no longer be available for 2025 and beyond. The gap will continue to grow and will have to be fully covered by the state budget. As of today, the contribution capacity of the healthcare system—meaning the ratio between expenditure levels and their coverage from contribution revenues—is already lower than that of The Social Insurance Fund. Over the next three years, up to one-third of the NFZ’s expenditures will be financed by state budget subsidies. The relative deficit of the public payer will be more than twice as high as that of the social insurance system.
The root causes of the financial gap remain unchanged and stem from the NFZ’s liabilities that exceed revenues from contributions or other sources, such as the sugar tax. A significant portion of these obligations is tied to the implementation of the Minimum Healthcare Expenditure Act, which imposes lasting financial commitments carried over to subsequent years.
Łukasz Kozłowski, Chief Economist of the Federation of Polish Entrepreneurs, highlights:
Salary raises for medical staff are funded by increasing the valuation of healthcare services. In 2023 and 2024 alone, successive health ministers approved increases of valuation of 15 billion PLN and 15.2 billion PLN, respectively.
Additionally, the Central Statistical Office (GUS) reported a 14.3% increase in the average annual wage for 2024, triggering further legally guaranteed raises and additional financial obligations worth billions.
Excessive Deficit Procedure
The increasing dependence of the healthcare system on budgetary funds coincides with the European Council subjecting Poland to the Excessive Deficit Procedure in July 2024 following a recommendation from the European Commission. Starting in 2025, Poland’s public finances will be under close EU supervision until the procedure concludes. This year will be the first in which Poland must begin implementing the recommendations of the European Commission. Twice a year, Polish government will be required to submit detailed reports to the European Commission on the measures taken to limit the deficit.
Healthcare financing from budgetary funds has existed for years, but in 2018, subsidies for the NFZ amounted to just 0.2% of GDP. In recent years, however, this process has accelerated dramatically:
– In 2023, the financial gap reached 0.6% of GDP.
– In 2024, it increased to 0.8% of GDP.
– Projections suggest it could rise to between 1.7% and 1.9% of GDP by 2028.
Łukasz Kozłowski raises a concern on this matter:
In the coming years, we must reduce the public finance sector deficit to 3% of GDP. At the same time, the financial gap in the National Health Fund (NFZ) will account for nearly two-thirds of the allowable deficit. We need to restore the self-financing nature of the system, increase the revenues of the public payer [NFZ], and halt the processing of legislative proposals that would reduce the NFZ’s revenues. These objectives are irreconcilable.
Stabilizing Expenditure Rule (SRW) in Healthcare
For many years, the financial plan of the National Health Fund (NFZ) has been amended multiple times throughout the year due to additional revenues arising from better-than-expected collection of health insurance contributions and increasing costs on the side of the public payer. In some years, there were dozens of amendments, several of which required opinions from the National Health Fund Council, the Parliamentary Health Committee, and the Parliamentary Public Finance Committee. According to the procedure, the original plan and any amendments must be approved by both the Minister of Health and the Minister of Finance.
In 2024, the difference between the initially planned and the final healthcare expenditures in the NFZ’s financial plan amounted to PLN 26 billion. The previous year, this figure exceeded PLN 23 billion. A fund that had previously been largely self-financing has now become deficit-driven, posing significant challenges for state budget management. For this reason, a stronger integration of NFZ cost and revenue planning with the budgetary process and fiscal rules aimed at ensuring public finance stability was introduced through the Stabilizing Expenditure Rule (SRW).
The SRW is a mechanism designed to limit the growth of public sector spending in Poland. It was introduced to ensure public finance stability and to prevent excessive deficits and over-indebtedness. The main objective of the SRW is to maintain a stable relationship between state expenditures and revenues, mitigating the risk of an excessive budget deficit. The rule sets the maximum growth rate of public expenditures for the entire public finance sector, which depends on factors such as the medium-term GDP growth rate and the level of inflation, reflecting the country’s economic potential. Thanks to the SRW, government spending becomes more predictable and better aligned with the current economic situation. The rule does not specify how much individual institutions or funds can spend but ensures that the overall growth of public sector expenditures remains within reasonable boundaries.
On January 10, 2025, the President of Poland signed the Fiscal Council Act, which amends, among other things, the Public Finance Act by subjecting the NFZ to stricter SRW requirements. This provision will come into force on January 1, 2026 and will apply to the preparation of the expenditure rule and the NFZ’s financial plan for 2027. Until now, the NFZ was subject to the so-called non-binding part of the expenditure rule. Its expenditures were only considered during the drafting of the initial budget bill. Later, during the fiscal year, the NFZ could adjust its financial plan and expenditure levels without affecting the spending of other entities.
Sławomir Dudek explains:
Previously, including the NFZ in the non-binding part of the SRW did not threaten public finance stability, as the NFZ did not generate a significant deficit. When its expenditures changed during the year, it was due to increased revenues from contributions—meaning that spending was covered by income. This changed in 2023. For example, in the 2024 Budget Bill, NFZ expenditures were planned based on the initial projection from July 2023, amounting to 167.2 billion PLN. Ultimately, these expenditures could exceed this amount by more than 26 billion PLN, reaching 193.5 billion PLN. Under the current expenditure rule regulations, an increase in NFZ spending does not require cuts in other entities covered by the expenditure rule, even though the NFZ’s financial gap in 2024 has significantly increased the public finance deficit. Therefore, to protect public finance stability, the NFZ has rightly been included under the binding SRW limit. Starting from 2026, it would be necessary to cut that PLN 26 billion from other agencies, funds, or budgetary sections—or compensate for it through tax or contribution increases.
The Ministry of Finance will not be able to approve any changes to the NFZ plan that would alter the overall, non-exceedable spending limit. This means that before proposing an increase in NFZ expenditures, cuts or reductions in other areas of the state budget must be decided on.
