Xinhua Insight: Insurance reform weaves security net for "healthy China"

A cerebral hemorrhage in December last year didn't kill Liu Xiangyi, a farmer from Antu County of northeast China's Jilin Province, but the medical bill almost did.

To treat his disease, it cost about 34,000 yuan (5,200 U.S.dollars), or three times the per capita annual net income in the province.

"I was desperate when I thought about the high medical expense," said Liu's wife, Li Xiujie. "I was surprised that we only had to pay only 5,000 yuan when my husband was discharged from hospital because 85 percent of the expense was covered by insurance."

As part of the plan to build a "healthy China" laid out in the proposed 13th Five-year Plan (2016 to 2020), the country is reforming its health insurance system to provide the population with help against looming medical expenses.

The new changes have already seen 95 percent of the 1.3 billion-plus Chinese people covered by the medical insurance scheme, according to official data. But high expense for treatment of critical illness may send ordinary Chinese families, like Liu's, back into poverty again.

To root out poverty brought by illness, provinces like Jilin, Heilongjiang, Guangdong and Hainan started experimenting commercial insurance for critical illness to complement basic medical insurance.

Under such a scheme, part of the insurance fund is allocated to commercial companies to cover insurance for major diseases. People don't have to pay additionally to get a 10 to 15 percent higher reimbursement rate than basic medial insurance.

Around 700 million people are benefiting from the complementary insurance offered by 16 insurance companies after the pilot program expanded to 27 provincial regions last year.

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To address the increasing demand of medical treatment outside of a registered residence, 31 provincial regions have established settlement service allowing people to be treated and pay for the treatment outside their home cities.

Patients in Jilin and east China's Zhejiang Province, for example, can go to hospitals in the other cities of the province and directly get medical reimbursement there. Previously, they were required to go through lengthy and inefficient transfer procedures to claim their insurance in their registered residence areas.

"Now it's much more convenient. I don't have to shuttle back and forth between my hometown and Changchun to reimburse my treatment expenses," said Jiang Delin, who left his home and came to the capital city of Jilin to receive better treatment for his lung cancer.

"Before leaving home, I had borrowed a large sum of money for fear my medical insurance would not work on expenses in Changchun and the hospital would stop taking me in," he said. "It turned out that my medical insurance works the same here as at home."

Experts expect the service will expand across provincial regions to meet a huge demand of China's aging population as more and more senior citizens move to live with their children working in other places.

NARROWING URBAN-RURAL GAP

After local pilot projects proved effective, policymakers decided in January 2016 to merge China's two separate medical insurance schemes for urban and rural residents into one to guarantee equal access to basic health care.

Before the merger, China had three separate medical insurance schemes - basic medical insurance for urban employees, the new rural cooperative medical scheme and basic medical insurance for city dwellers not covered by the first two schemes, mainly underage and unemployed people.

Previously, the two schemes were managed by different government departments, with the Ministry of Human Resources and Social Security managing that for urban residents while the the National Health and Family Planning Commission administering another for rural people.

Lack of inter-department cooperation and the underlying inequality led to growing calls for a single unified medical insurance administration.

A trial merger in Shanghai and Shandong put in place a unified medical insurance scheme with the same coverage, fund raising policies and fund management before it was implemented nationwide.

Over the next five years, policymakers have vowed to deepen reform of the health system, and build a basic healthcare system covering both the urban and rural areas and a modern management system for hospitals.

According to a statement issued after a meeting of the Central Leading Group for Deepening Overall Reform, senior Chinese leaders have agreed to create a "multi-layered medical security net" that integrates basic medical insurance, insurance for major diseases, medical assistance, commercial medical insurance and charity funds. Endi