The huge fiscal pressure on critical illness insurance
On July 22, the State Council released a statement that all participants in China's basic medical insurance system for urban and rural residents will be protected against critical illness by the end of this year. The reimbursement ratio should reach at least 50% this year and will increase gradually in future. By 2017, a relatively sound system for critical illness insurance will be established.
For now, the critical illness insurance is running on trial basis: when a patient's medical bills for necessary treatments using the existing basic medical insurance system exceed a certain level, he or she will receive reimbursements from the scheme. With this system promoted, it would greatly improve the quality of Chinese medical insurance.
China’s multi-layered medical system
The Chinese medical insurance system is composed of urban employee basic medical insurance (UEBMI), urban resident basic medical insurance (URBMI) and rural cooperative medical system (RCMS).The guarantee level of UEBMI is the highest, but covers less people. Even though there are 1.1 billion participants in URBMI and RCMS, taking 82% of the total population, the related reimbursement ratio is very low. This critical illness insurance system covers participants in both URBMI and RCMS, and with over 50% reimbursement ratio, it prevents people to face poverty owing to their medical expenses. According to statistics, the disposable income of rural household in 2014 is only ￥10489（$1636）that can’t afford the medical expenditure of any serious illness.
Although the original intention of this policy is good for the residents, the reality is cruel. If we have enough budgets to cover all illnesses in medical insurance, we’ll certainly do so. However, the critical illness insurance for urban and rural residents has to rely on governmental financial support.
From the view of national scope, RCMS has financed 297.3 billion RMB, among which, 273.2 billion RMB is subsidized by government, which means the personal pays mostly nothing. Although there is no financing data for URBMI, the governmental fiscal subsidies reached 67.6 billion RMB. What’s the government paid for these two medical insurances has outdistanced the one for endowment insurance (329.5billion RMB), which means the payment imbalance of urban and rural residents medical insurance is much more serious than the one of endowment insurance.
At present, there is no authoritative data to prove how much the burden of critical medical insurance will be. In accordance with the payment of two medical insurances in 2015, even if the critical illness patient share was 20%, the newly added cost in one year would be at least 50 billion RMB. Where will this part of money come from? It is a question. Even so, the State Council’s statement does not make it clear. It is required that a certain proportion or limit of current urban and rural residents medical insurance funds shall be used directly as the critical illness insurance funds, while for the regions without sufficient surplus or even without surplus, the critical illness insurance funds shall be extracted from the annual financing funds. However, since there is so little surplus for both medical insurance for cities, which is not even close to a hundred billion RMB, it will have to rely on fiscal subsidies.
Medical is essential for everyone if we all want to live a longer life, but we have to admit that it is luxury since we do not have enough money to give everyone a chance to do so, especially when one is old and stuck with critical illness, the medical treatment in the last years of one’s life will cost more than 90% of all his life time medical cost. If the medical cost is undertaken by the patient or his medical insurance paid in full, there is no cause for much criticism. However, when one’s financial is insufficient to cover the medical cost and the deficits shall be undertaken by governmental finance, the balance of this policy shall be considered thoroughly.
Ignoring residents who couldn’t afford the critical illness or letting them die without doing anything is not right, but it has to be clear that what kind of level the government shall help them and how much the obligation of common taxpayer shall have aiming at the critical illness insurance system. It is a pity that the answer is not given in the governmental documents, which may make the government in a very awkward situation: either it adds tax to afford the additional critical illness insurance or it fails to fulfill its promise and causes society instability.
Published in Southern Metropolis Daily | 2015-8-6
