Insurers to help run national medical plan
Beijing has opened the door for commercial insurers to help run a national medical insurance plan.
The move is to help ensure the efficient management of the scheme, which involves hundreds of billions of yuan annually.
Under guidelines jointly issued this week by the Health and Finance ministries and the China Insurance Regulatory Commission, local governments are encouraged to enlist commercial insurers to manage the New Rural Co-operative Medical Scheme.
The Ministry of Health will oversee the scheme, which offers basic medical insurance to rural residents.
The insurance premium varies in each province, but it is roughly 300 yuan (HK$368) a year per resident.
About 800 million Chinese are covered by the plan.
Although insurance firms will not be offering coverage, they will be involved in managing the scheme, such as certifying insurance claims.
On its part, Beijing has hailed this national health care scheme as a major success in its reform efforts. The work on the reforms, which began three years ago, is expected to intensify over the next three years.
On Tuesday Vice-Premier Li Keqiang, the top official overseeing health care reforms, said the scheme had reached a critical point. But he said more people should be included and their health care coverage should be improved.
While the state will pay insurers for their work, the money won't come from the fund itself, says Nie Chunlei, deputy director of the Department of Rural Health Management under the health ministry.
Besides having to be certified, participating insurers must have a good network of branches, especially at the township level, says Gong Yisheng, an official with the China Insurance Regulatory Commission. 'There are only about 10 insurance firms that meet such requirements,' Gong said.
In the past few years, says Nie, three insurers - China Life, China Pacific Insurance and PICC Health Insurance - have been involved in the scheme's pilot programme in four cities. They are Jiangyin in Jiangsu, Jinjiang in Fujian, and Zhengzhou and Luoyang in Henan .
Nie also says that it is impossible for the state to estimate the total cost of enlisting commercial insurers in the national scheme, as insurance needs vary across provinces.
For instance, an annual management fee of 1.2 yuan a person may be sufficient in a province, but a fee of five yuan may be inadequate in another. Jiangyin, for example, pays a 3 million yuan lump sum in annual health care management fees, but in Luoyang the cost is 1.2 yuan per resident.
Mao Zhengzhong, a health care economist at Sichuan University, has studied the scheme in those four cities. But he says he sees no clear cost savings by having insurers manage the scheme rather than the government.
'There was no obvious trend of one model saving more money than the other,' Mao said, citing figures harking back to 2009.
It is unclear when the pilot scheme started.
However, Nie says the decision to outsource the management of the fund would lead to greater efficiency.
'It's possible that in the first two or three years you see that the government pays more to buy the service,' Nie said. 'But in the long run the cost will be lower because the cost to establish and run such a government office, including hiring civil servants and factoring in their pensions, would be huge.'
But by outsourcing the management of the national scheme, Beijing will need fewer people to regulate the insurers, ensuring that they adhere to the terms and conditions, Nie says.
Beijing wants no less than this percentage of mainlanders to be covered by the national medical care insurance plan