The Welsh Government has set out an extra £165m for the NHS in Wales as it announced its spending plans over the next two years.
It said the additional money would go towards protecting frontline services.
But it warned that "difficult choices" will still have to be made for the NHS amid high inflation and rising energy costs.
Health and social services already make up more than half of the overall amount the Welsh Government has to spend.
The announcement comes at a time of unprecedented pressures on the health service, with waiting lists higher than ever, ambulance response times the slowest on record, and thousands of workers across the sector voting to strike over pay and working conditions.
Despite strikes scheduled to begin on Thursday, the Welsh Government has not agreed an improved pay offer for nurses, and said it cannot do so without more funding from the UK Government.
Opposition parties argue that the Welsh Government does have financial levers at its disposal, and the UK Government has said Wales will receive an extra £1.2bn over the next two years.
The extra funding for the NHS will aim to help it respond to urgent and emergency care, reduce long waiting times and transform the way care is provided by creating more services closer to people's homes.
The Welsh Government has said its budget is underpinned by a priority to protect frontline services in health, schools and in local authorities.
£70m of that funding will be used to continue paying social care workers the real living wage, which has risen to £10.90.
It's hoped this will help to recruit and retain staff as the sector grapples with huge workforce shortages, which is making it harder for hospitals to discharge patients.
An extra £18.8m has also been announced to provide emergency cash payments to those facing financial hardship.
Health leaders will be hoping this helps to reduce the impact of the rising cost of living on people's health.
Dr Olwen Williams, Vice President of the Royal College of Physicians in Wales, said: "Poverty hits people very hard.
"It hits their diets, it hits their housing, it hits the fact that they haven't got access to transport in the same way, and also that they have to live in conditions where they can't afford to heat or feed their children.
"Those issues do cause chronic diseases - we see an increased risk of cardiovascular disease, stroke and of dementia in people who are living in poverty.
"But also we're aware of an increase in psychological ill-health for people who don't have a very good standard of living. So this doesn't just impact the elderly, it impacts across all ages from birth to death."
Health leaders have called on the Welsh Government to prioritise tackling social factors that influence public health.
"We've already seen the average lifespan of individuals living in Wales drop slightly over the last two years," Dr Williams added.
"Potentially what will happen if people can't access high standard healthcare which is safe and free at the point of delivery, we could see what has been a longstanding improvement in health deteriorate, and that will be across all ages, so there are some major challenges ahead in restoring people's standards of living."