context: On 1 August, the State Council released 'Guiding opinions on improving long-term mechanisms of basic medical insurance enrolment' in response to challenges of medical insurance funds. With a hospitalisation rate of 21.86 percent compared to the OECD average of 14 percent which strains the medical insurance fund, the country also faces the challenge of lowered willingness and capability to pay for medical insurance.
Since the 18th National Congress, basic medical insurance coverage in China has consistently stayed at 95 percent. Participation quality and structure have improved, with resident medical insurance covering over 900 million people.
Improved departmental data sharing and collaboration are crucial to strengthen participation. However, challenges remain
- urbanisation has led to a floating population of 375 million
- increased personal contributions
- some choose to participate only when sick
- need to enhance funding and treatment policies to protect all participants' interests
The Guiding opinions clarify that insured individuals can enjoy the following major benefits
- removing residency restrictions
- for employees in mega-cities
- expand the mutual aid scope of employee medical insurance personal accounts from family members to close relatives
- can use across-provinces
- reward mechanism
- increase the maximum payment limit for critical illness insurance the following year
- punishment
- three-month freeze period will increase if insurance not paid consecutively
- covering more village clinics and promoting grassroots drug procurement
Zhu Minglai 朱铭来 Nankai Research Centre for Health Economics and Medical Insurance director pointed out that
- there’s a lack of mechanism to ensure everyone enrols in medical insurance
- one of the core tasks is to cover major illnesses
- involves a limited population and has a minimal negative impact on the overall safety of the fund
- directly increasing the reimbursement rate has broad coverage but lacks specificity
- cannot prevent impoverishment due to illness
- each region can independently increase benefits or add supplementary coverage based on their fund balance while maintaining a consistent basic benefits list
Qiu Yulin 仇雨临 Renmin University School of Labour and Human Resources director found that about 5 percent of insured individuals opt out of their original insurance schemes primarily due to
- voluntary participation principles
- poor connectivity during regional movement and career changes
- low benefit levels
- high personal cost
Institutional factors play a more significant role in this behaviour than individual adverse selection. To address this, she suggests
- improving the basic medical insurance system's design, incentive mechanisms and governance structure
- establishing differentiated contribution mechanisms and unified benefit guarantees
- continuing to expand the coverage of outpatient chronic disease insurance
- promoting negotiations for high-priced anti-cancer drugs
- enhancing the system's attractiveness within the fund's affordability