Health insurance needs to be expanded

By Shan Juan (China Daily)
Updated: 2007-03-16 07:01

People will be able to choose from a wide range of medical insurance programs when China reforms its public health system, central government officials said.

Researchers and international organizations have long argued for China to move away from a government monopoly of all health-related services.

In January, Chen Wenhui, assistant chairman of the China Insurance Regulatory Commission (CIRC), said commercial insurance services were a vital part of helping China build up "a multi-level health care network with all its citizens insured".

At present, according to figures from the CIRC, commercial health insurance covers only 10 percent of society's total medical costs, a far cry from its expected target.

But there is growing optimism that comprehensive health cover will contribute heavily to a healthier Chinese society.

"Commercial health insurance will surely play a considerable role in the course of the Chinese medical reform," Liu Yongfu, vice-minister of labor and social security, said on the sidelines of the annual session of the National People's Congress (NPC).

Presently, the government-sponsored medical care plan, which is available primarily for urban residents, takes care of only 20 percent of the total medical costs.

In other words, up to 70 percent of the nation's medical bills could still be insured.

Government funding of the national medical care, of some 1.5-2 trillion yuan ($195-260 billion) per year, is mainly used to cover the most common illnesses.

The remaining portion, up to 6 trillion yuan ($780 billion), would be the area to be covered by various insurance programs, whether based on collective arrangements or individual purchases.

Such a medical funding scheme, according to Chen, would be an ideal scenario to head off possible runaway medical bills, and give people health security.

China commenced rebuilding its medical system in 2005, after Beijing admitted previous attempts at reform were unsuccessful. Many Chinese families have complained about spiralling health costs.

But, there are plans to expand the "welfare umbrella" to help ordinary Chinese people, improve the quality of medical services, and cap drug prices and medical treatments.

The ultimate goal of the reform is to include all the citizens in a multi-level health care and insurance system, according to Health Minister Gao Qiang.

Insurance underwriters will in the process have wide access to the health care market, according to Chen the CIRC official, as he also urged them to "seize the opportunity" to expand their medical insurance business.

Working together with the government finance and commercial insurance programs can, as he said, help China avert a dramatic rise in people's healthcare costs.

In fact, as early as 2004, the CIRC approved the People's Insurance Corporation of China (PICC) to run pilot programs in the healthcare market.

Nowadays, according to CIRC statistics, the demand for health insurance in the world's most populous country is expected to rise to no less than 3 trillion yuan ($390 billion) in 2008.

However, there are problems in matching the growing claims with the premiums, at least in some regions.

Tan Qijian, a senior manager of PICC Health Insurance's Beijing branch, told China Daily that some insurers had even suffered a loss of as much as 200 percent in recent years from health insurance schemes.

Wang Xianzhang, chairman of the Insurance Association of China, said a comprehensive medical insurance network required a joint effort by all sectors of society and the government.

He said the commercial health insurance industry was still fumbling in its attempts to properly integrate with the government framework of basic medical insurance for urbanites and rural cooperative medical care.

"The most important thing the government can do at this point is to define for us in the insurance industry what it will do and what is left for the industry to do," he said.

(China Daily 03/16/2007 page7)