Thursday, 5 December 2013

China: Urban medical insurance scheme has surplus of US$125 bln

China's urban social medical insurance scheme reported an accumulated surplus of CNY764.4 billion (US$125.5 billion) at the end of 2012, a disclosure which has prompted calls for higher reimbursements for medical bills to be made from the fund or for the money to be used to subsidise commercial medical insurance premiums.
Mr Lei Haichao, the deputy director of the Beijing health bureau, speaking at a recent healthcare economics conference, said that except for 2010, the national-level urban basic medical insurance fund had reported a surplus rate of at least 20 percent since 1999. The peak rate to date is 35 percent which was attained in 2001. Of the accumulated surplus of CNY764.4 billion, CNY269.7 billion belonged to individual medical savings accounts with the remaining CNY494.7 billion maintained in a common pool.

Experts say that the fund should balance its receipts and expenditure each year, to avoid huge surpluses. High surpluses mean that the fund is not being used effectively for healthcare. The surplus continues to increase even as there are groups of people who say that they cannot afford healthcare. At the same time, high surpluses pose the risk of being misappropriated.
The accumulated surplus has led to calls for reform of the system, according to local media reports. For instance, local governments have increased their subsidies for contributions to the social healthcare fund from an average of CNY80 per person in 2008 to CNY280 this year.
Professor Sun Jie, deputy director of the Insurance College of the University of International Business and Economics, suggests that the government could consider lowering the deductible sum for senior citizens as well as promote the purchase of critical illness cover from commercial insurers.
In August last year, the central government announced a decision to expand the coverage of the country's healthcare insurance system to include the treatment of critical illnesses. At present, 134 cities in 25 provinces have started pilot programmes for major-illness insurance. To date, at least 34 insurance companies have been given approval to offer such cover.
As the provision of major illness insurance cover is seen as a public service, the insurers are expected to make a small profit. It is understood, however, that it is still too early at the moment for the business to be profitable.
Source: eDaily

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