A slew of local governments across China have postponed the deadline for enrolment in this year’s state health insurance scheme covering urban and rural residents amid declining levels of participation, which are largely attributed to surging premiums.
Directives issued over the past few weeks have vowed to persuade more people to contribute to the voluntary scheme, which covers roughly just over 70 per cent of China’s 1.4 billion population.
A falling participation rate is threatening the sustainability of China’s state medical insurance system as the country deals with the effects of a rapidly ageing population.
At least seven provincial-level governments, as well as dozens of cities from seven other provinces, have announced extensions for subscribers to join the scheme, which is intended for anyone who is not formally employed and is managed by the local governments.
Serving as one of the two pillars of China’s basic medical insurance system – the other being a mandatory plan for urban employees – the urban and rural residents’ scheme typically requires subscribers to pay the annual premium before the start of the year.
The voluntary scheme, which has been in place since 2003, has a lower fixed annual premium compared to the urban employees’ programme. In recent years, a government subsidy accounted for over 60 per cent of the total premium for the urban and rural residents’ scheme.
Over 25 million people dropped out of the scheme in 2022 due to a combination of factors including rising premiums, lower incomes and a lack of awareness.
The number of subscribers has declined by millions every year since 2019, according to the National Healthcare Security Administration.
Last week, the government in the northwest province of Gansu ordered local officials to target students, migrant workers and newborns to help expand enrolment.
Grass-roots officials were told to check “person by person and household by household”, the Gansu provincial medical security bureau said.
For migrant workers who have left their hometowns, officials should contact the local government of their place of work to ensure participation in the scheme, the bureau added.
In Yuncheng in the central province of Shanxi, the local government vowed to extend the payment period to the end of February to “mobilise enrolment” during the New Year and the Lunar New Year holidays.
The goal is to ensure “all those that should be covered are covered”, according to a directive issued at the end of last month.
Officials and researchers have warned against dampening public enthusiasm for China’s state medical insurance scheme, which is under mounting pressure amid a shrinking workforce and growing group of retirees.
Hua Ying, a researcher from the Institute of Population and Labour Economics under the Chinese Academy of Social Sciences, said the scheme is facing “a crisis of continuously weakening sustainability” because of systematic flaws.
Instead of a lower fixed amount set by the government, the premium for subscribers should be linked with their income to guarantee equality, she argued in a research paper published in the September issue of the China Academic Journal.
The financial burden caused by the premiums for the lowest income group in rural areas is over 20 times compared to the highest income group in urban areas, she noted.
“Our research showed that surging premiums for individuals have aroused complaints among low income people in many regions, significantly impacting their enthusiasm for enrolment and leading to an increasing risk of cancellation,” she wrote.
The minimum annual personal contribution required for the urban and rural residents’ scheme has surged from just 10 yuan (US$1.4) in 2003 to 380 yuan last year.
In a district in Baoji city, Shaanxi province, the participation rate in the urban and rural residents’ scheme has declined for the past three years, falling from 98.5 per cent in 2021 to 96.3 per cent in 2023.
An article published on the website of the province’s political advisory body in November attributed the decline to the increased premium.
“The trend of low interest in the scheme and cancellation is set to continue,” it warned, urging for premium increases to be halted and linked with individual incomes. (SCMP)