China’s health insurance scheme lost millions of subscribers

China’s health insurance scheme lost millions of subscribers

China’s health insurance scheme lost millions of subscribers | Insurance Business Asia

Worrying trend expected to continue

China's health insurance scheme lost millions of subscribers

Life & Health

Kenneth Araullo

Recent data indicates a significant decline in subscribers to China’s state health insurance system, one of the world’s largest healthcare schemes.

In 2022, the system, which encompasses various programs and covers over 1.3 billion policyholders, experienced a drop of 19 million enrolees. This trend may continue, as reports from the first nine months of 2023 in seven out of eight provinces showed a further decrease in enrolment compared to the previous year.

According to a report from The Financial Times, officials and healthcare analysts attribute this decline to a combination of rising premiums and co-payments, limited coverage, and a decrease in household incomes, particularly affecting farmers and migrant workers. These groups often lack access to more comprehensive urban and private benefit schemes, making the cost of health insurance increasingly unaffordable.

This decrease in healthcare coverage poses a challenge to the recovery of China’s economy, which is already contending with issues in the property sector and reduced exports.

Premiums have more than doubled

Over the past decade, premiums for China’s state healthcare system have surged, with the minimum premium for the main policy more than doubling since 2018. This increase starkly contrasts with the modest 24% rise in average wages for migrant workers during the same period, according to the National Bureau of Statistics. Rural policyholders also face higher co-payment rates, sometimes between 50-70%, for treatments in urban hospitals equipped to handle severe illnesses.

Local governments, struggling with their own financial constraints, have been unable to subsidise these rising costs, leading to increased financial burdens on policyholders. In Anhui, a central province with a largely rural population, there has been a noticeable decline in enrolment in the local scheme, with a 3% drop in 2023 following a 4% decrease in 2022.

Despite efforts to maintain enrolment numbers, most officials do not anticipate significant intervention from Beijing, as the focus remains on reducing public health expenditure amid the economic downturn. This situation puts additional pressure on local health authorities to manage healthcare costs without adequate government support.

The decline in insurance coverage is particularly concerning in underdeveloped areas with older populations. There are reports of rural and migrant families discontinuing coverage for their teenage children, gambling on their general health to save costs. However, this strategy poses risks, as the onset of a serious illness could lead to substantial treatment costs, potentially bankrupting families.

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