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Many mainlanders often complain of large out-of-pocket health care expenses because of low levels of insurance coverage. Photo: Xinhua

China will expand medical insurance to alleviate 'poverty by illness'

Health care reform will see all residents covered for major illnesses by end of 2016

The mainland will expand medical insurance to cover all critical illnesses for all urban and rural residents by the end of the year, the State Council said yesterday, the latest step in a plan to fix a health care system that has sparked public discontent.

The council said half of the medical costs would be covered by insurance in an effort to "more effectively reduce the burden of medical expenses", in a statement posted on the government's website.

President Xi Jinping's government has touted access to affordable health care as a key platform of his administration, underscoring the importance of meeting the needs of the nation's population of almost 1.4 billion.

Many mainlanders often complain of large out-of-pocket health care expenses because of low levels of insurance coverage.

Many people say the cost of serious illnesses such as cancer and diabetes can bankrupt households under the existing system.

The aim of expanding the country's health insurance was to "effectively alleviate poverty caused by illness" and to build a strong universal health care system, the council said.

Since 2009, the mainland has spent 3 trillion yuan on health care reform.

But even with that investment, the mainland health care system still struggles with a scarcity of doctors, attacks by patients on medical staff and a fragmented drug distribution and retail market.

Economists say it is crucial for the mainland to improve the quality of its health care if it wishes to remake its economy and boost domestic consumption.

They say a stronger safety net will encourage mainlanders to spend more and save less.

The mainland's health care spending is set to hit US$1 trillion by 2020, up from US$357 billion in 2011, according to multinational management consultancy McKinsey & Co.

That is thanks to a rapid inflow of money from private insurers, hospital operators and other investors.

This article appeared in the South China Morning Post print edition as: Mainland to expand medical insurance
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