China's public health insurance to cover greater ground
Insurance protection expanded to give higher reimbursement for 'catastrophic' medical bills, so that the sick will not lose everything
China's health care reform efforts took a step forward last month when it guaranteed increased insurance protection for critical illnesses. The move is expected to help families from going bankrupt if a member becomes afflicted with a serious condition.
In the new guidelines, the National Development and Reform Commission (NDRC) and five other government agencies promised greater protection for people with public health insurance policies in rural areas as well as for unemployed people in urban areas, in part by ensuring that at least half of these people's medical expenses are covered by insurance.
Contrary to the previous practice of offering coverage based on the kind of illness, the new insurance scheme for serious illnesses promises to disregard the disease and offer high reimbursement in cases of "catastrophic medical expenditure".
"In theory, the greater the bill, the higher the reimbursement level. With higher premiums, management standards and protection levels, the reimbursement level will be gradually increased, and the medical bills shouldered by individuals will be lifted as much as possible," the new guidelines said.
An NDRC deputy director, Sun Zhigang , was quoted by Xinhua as saying that the new plan means to ensure that a patient's total medical expenditure does not exceed the average household expenditure for health care - an average based on the annual per capita disposable income in urban areas, or on the net income level in rural areas.
Wang Hongzhi , a health care specialist at management consultancy Allpku, noted that the current forms of public insurance are all capped with a maximum reimbursement level, "while the new insurance scheme has scrapped that cap and increased the protection level". "It's a very good thing to do," he said.
"However, a mechanism should be established to bridge this [new] insurance with the current forms of basic public insurance," he added. "The relationships between these schemes should be smoothed out."
A further problem to be addressed, Wang said, was the need to narrow the gap between public insurance in rural areas and that offered in larger cities.
China's three current forms of public insurance are the Urban Employee Basic Medical Insurance, for people working in cities; the Urban Resident Basic Medical Insurance, for those who hold residency in an urban area but are jobless, such as students, the elderly and children; and the New Rural Co-operative Medical Scheme, for farmers.
China boasts that more than 95 per cent of the population is covered by public insurance, but many residents still feel heavily burdened by medical bills, as coverage is limited.
Sun said that currently, only about half of all medical expenditures are reimbursed, and in many areas, serious diseases are not covered by basic public insurance.
It was only two years ago that congenital heart disease and leukaemia were included in a pilot scheme for basic medical insurance. But this year, eight types of chronic diseases were included, and 12 types of serious illnesses, such as lung cancer, will be included in basic medical insurance coverage.
Another NDRC deputy director, Xu Changshan, said that some cities have experimented with buying their residents' health insurance from private commercial providers to improve coverage for treatment of serious illnesses.
The commission said the occurrence rate of serious illnesses across the country was about two to four for every 1,000 people.
Of the cities that experimented in pilot programmes involving medical coverage, the NDRC apparently favoured the model utilised by Taicang in Jiangsu province. The city opted to consider as a serious illness any affliction that resulted in medical bills exceeding 10,000 yuan (HK$12,230) and that therefore made its patient eligible for coverage under the pilot plan.
The scheme took effect in July last year, with the city's selected insurer, PICC Health Insurance, providing uncapped medical coverage for those whose bills came up to between 10,000 and 500,000 yuan. As a result, the insurer said, the reimbursement level for inpatient bills increased from 53 to 82 per cent.
Xu had said earlier this month that finance authorities were drafting specific rules to prevent commercial insurance companies from profiting too much from the new insurance scheme. The rules to be drafted include restrictions being placed on market access, product design and fund management.
But an analysis report by Shanghai-based Shenyin Wanguo Securities suggested that by offering public health insurance, commercial insurance firms would see an increase in business opportunities and greater access to potential clients, which would eventually prove profitable.
Initially, though, firms could suffer losses as they absorb costs and because the government would cap the profits the firms can make from the public insurance schemes, the report said.