Two plans merge into one health insurance program

Updated: 2016-01-13 08:22

By Wang Xiaodong and Shan Juan(China Daily)

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Rural residents and urban unemployed will get same coverage

Medical insurance programs for China's rural residents and urban unemployed will be merged into a single basic health insurance plan to improve equality and efficiency, according to a notice issued on Tuesday by the State Council, or China's cabinet.

The government will increase subsidies to the basic insurance program, and subscribers will share a greater burden of the total insurance fund, the notice said.

The new policy will become China's largest health insurance program, covering more than 1 billion people. Another major one is the basic health insurance program for urban employees.

Under the new policy, which is largely subsidized by the government, all subscribers will pay the same premium and enjoy the same reimbursement rate regardless of their residency status, it said.

The notice also said local governments should formulate plans to carry out the policy before the end of the year.

Currently, China has three health insurance policies: one for the urban employed, established in 1998; a new rural cooperative medical plan established in 2003; and a plan for urban unemployed, which begun in 2007.

The latter two are highly subsidized by the government, while the policy for the urban employed, paid for by employees and their employers, has the best reimbursement rate.

Nationwide, about 60 percent of medical expenses for subscribers in the latter two programs can be reimbursed, according to the National Health and Family Planning Commission.

The existence of two independent systems for rural residents and the unemployed in urban areas have resulted in some problems, such as repeat subscriptions and repeat government investment, according to a statement released on Tuesday by the commission.

The reform will help residents in rural and urban areas enjoy the same basic rights to medical insurance and promote a more fair society, the commission said. Basic medical insurance funds in some areas of China have been diminishing rapidly in recent years due to increasing medical expenses and a slower increase in investment, analysts said.

Ni Huping, a chief official for medical insurance at Zhejiang province's civil affairs department, said now is the right time to merge the basic medical insurance programs.

"Now the two programs have roughly the same standards of ensuring security, so it will not be difficult to merge the two into one," he said.

Ni said the two programs have been merged into one in Zhejiang since 2014.

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Fact file

There are three basic medical insurance programs in China - for rural residents, the unemployed in urban areas and urban employees.

For the first two programs, subscribers pay about 120 yuan ($18) a year, with government subsidies of about 380 yuan per person. Subscribers enjoy about 60 percent reimbursement of their total medical expenses on average nationwide.

In the program for urban employees, subscribers pay 2 percent of their monthly salary, while their employers pay more.

In general they get reimbursement of more than 70 percent.

(China Daily 01/13/2016 page4)