Huang Shuixiang, a 73-year-old farmer in east China, never expected to see the day he would be given 188.68 yuan (US$22.7) in subsidies for his hernia operation, and he said that never before in his lifetime could a farmer apply for reimbursement as urban people do.

China has a farmer population of over 900 million, who were not entitled, for a very long period of time, to the basic medical insurance urban people were, although they were more vulnerable because of their far lower income than urbanites.

Huang and his family made a living simply on farming in Yuanqian Village of Bayi Town of Nanchang County in Jiangxi Province, and his three-member family's annual income was less than 5,000 yuan (US$602). Huang had to delay his operation for more than 10 years because of financial problems.

Of his ability to receive reimbursement for the operation, Huang said "Our ancestors never dreamed of such a good thing!"

China is launching an unprecedented project to build up a cooperative medicare system within eight years in rural areas, which will cover 900 million farmers with medical financial assistance and free them from worries of being unable to afford a cure.

Under this new medicare system, cooperative medical funds will be set up in rural areas with money from three parties: the central government, local governments and farmers themselves. The portions of funds paid by three parties vary in different regions. A farmer in the system will get varying portions of subsidies after he or she becomes ill and hospitalized.

In the eastern booming province of Zhejiang, the provincial government took a lead in the country in employing the new system, aiming to make it fully operational in the province four years earlier than the timetable for the whole nation.

"This will certainly enhance farmers' ability to shield themselves from risks of being unable to afford a cure when they are seriously ill, and will help prevent farmers from falling into or falling back to poverty because of catching diseases," said Xi Jinping, governor of Zhejiang.

In Chinese rural areas, there are about 30 million people still in poverty and 60 million living close to the poverty line. According to Chen Xiwen, a research fellow with the State Development and Research Center, a think-tank to the Chinese cabinet, 90 percent of farmers have to pay medical expenses solely by themselves, compared to 60 percent of urban dwellers, while farmers' income is about one third that of urban residents. As a result, a lot of farmers are unable to afford a cure when catching illness.

The outbreak of severe acute respiratory syndrome (SARS) this spring awakened policymakers' attention to health and medicare problems for rural people. The epidemic exposed farmers' vulnerability to health risks from diseases like SARS.

The Chinese government is vowing to build a relatively affluent Chinese society in the future two decades, and it is a key issue in reaching this goal to raise the living standards and quality of Chinese farmers, who account for 70 percent of the population.

Official statistics show that half of the poverty population in the country suffer from disease. "From this point of view, without a solution to farmers' medicare problem, it is hardly possible to realize a relatively rich Chinese society in overall scale," said Zhang Xiaodi, professor with the prestigious Zhejiang University. Zhang made an in-depth probe into the SARS impact on Chinese and Zhejiang economies and on the Chinese government's strategic goal of building an affluent society.

The central government was determined to set up an effective cooperative system to offer medicare for 900 million farmers and the system is scheduled to be expanded to cover all farmers by 2010.

The central government even promised to subsidize 10 yuan, plus another 10 yuan from a local government, for each farmer in central and west inland poor areas if they intend to participate in the cooperative system.

Zhang Xiaodi said the new system shows that the Chinese government holds great concern over farmers' interests and adopts policies in people's benefits, and it will fundamentally solve the problem of millions of farmers unable to afford medical treatment before.

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