Why did millions of people drop out of China’s national health insurance system?

But despite teachers’ best efforts, “there are still several students in each class whose families refuse to pay next year’s premiums,” Ma said.

According to the National Health Security Administration (NHSA), from 2019 to 2021 it covered more than 96% of China’s 1.4 billion people, but last year it fell by more than 1 percentage point to about 17 million subscribers. It will be lost.

According to experts in social security and rural issues, the reasons for this decline are believed to be multiple, including financial difficulties caused by the economic downturn and increased willingness to enroll in the system due to factors stemming from urbanization and overall integration of insurance systems. Examples include.

China’s national health insurance system consists of two systems: the system for urban employees dates back to 1998, and the system for urban and rural residents has been in place since 2003. .

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The urban workforce program is mandatory for formally employed workers and provides enhanced financial coverage and benefits with contributions made by both employer and employee.

Meanwhile, the scheme for urban and rural residents covers all unemployed people, including children. It is voluntary and has a lower fixed annual premium compared to the urban employee program. In recent years, government subsidies have accounted for more than 60% of total insurance premiums.

As urbanization increases, many migrant workers are moving from rural areas to cities in search of work, with enrollment in the urban workforce program increasing by more than 8 million people last year, according to NHSA. In contrast, about 25 million people dropped out of the system for urban and rural residents.

Professor He Wenjing, deputy director of the China Social Security Association, said that besides the effects of urbanization, this decline could be partly due to technological advances that encouraged some people to enroll in fewer schemes. He said there is.

For decades, policyholders could only claim expenses in one state because state health insurance systems are administered by local governments, leaving some migrant workers unable to travel to their hometown or place of work. I decided to take out insurance.

However, this problem was resolved last year when interstate reimbursements were allowed.

“Of course, there are other reasons as well, such as the affordability of insurance premiums for cash-strapped residents and insufficient awareness of health insurance,” Ha said.

The minimum individual contribution required for the Urban and Rural Resident Voluntary Program was just 10 yuan a year when it was established in 2003, but this year it has jumped to 380 yuan.

“Including two children and two parents, a family of six needs to pay 2,280 yuan, which is not a small amount for a rural family, especially when the economic situation is bad,” said Mr. said Li Nian, who lives in the village. To save money.

The average annual disposable income of rural residents across China last year was just over 20,000 yuan (US$2,819), according to official data.

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“My insurance premiums keep going up, but my income hasn’t,” Lee added.

Zhu Qizhen, a former professor specializing in rural issues, said the increase in out-of-pocket costs has made some rural residents doubt the value of compensation.

“There are still many drugs and services that are not covered by the system, so some people are dissatisfied with the reimbursement rate and discontinue their insurance,” he said.

Zhu said some people may think that if they don’t have to make a claim, their money is wasted.

Unlike car insurance, where the insured’s payment for the following year is reduced if no claim is made, premiums paid under the urban and rural resident health insurance system are settled on an annual basis. he added.

“There are also people who tend to push their luck, especially young people, who believe they are healthy enough,” he added.

Li Ling, a professor of medical insurance at Peking University’s National Development College, calls for reform of basic medical insurance for urban and rural residents and proposes lowering fixed premiums based on income.

Under the current system, policyholder interest is waning due to rising premiums, while increasing subsidies are placing an increasing burden on local governments, he said in an August interview with the Economic Observer. I pointed this out in an interview.

The Chinese government has promised to increase subsidies by 30 yuan (US$4.2) per policyholder this year, equivalent to an increase of 30 billion yuan.

In order to ease the pressure on both sides, Li proposed that “individual costs should be determined based on individual income, and the same treatment should be given when going to the hospital.”

She argued that this is an example of equality, calling the existing approach “egalitarian.”