The Communist Party of China (CPC) has announced that the upcoming Third Plenary Session of the 20th Central Committee will prioritize “deepening comprehensive reform to advance Chinese modernization.” While specific details remain scarce, insights can be gleaned from recent political discussions and public reports.
Notably, the Seventh Meeting of the Standing Committee of the 14th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), held from June 4 to June 6, offers clues about the agenda. This meeting is particularly significant for three reasons:
- The CPPCC, as an advisory body, directly influences top decision-makers.
- The CPPCC has publicly endorsed several policy recommendations, signaling institutional support.
- The advisors behind these recommendations are influential figures, often senior government officials or top experts in their fields.
The CPPCC has put forward 14 recommendations from various advisors under the theme of “Building a high-level socialist market system.” Two recommendations, focusing on potential changes to China’s state-run healthcare insurance system, are especially noteworthy. These changes could significantly impact the well-being of China’s 1.4 billion people.
China’s national medical security system is a multi-tiered structure with basic medical insurance (BMI) as its cornerstone. The BMI system serves two main groups: employees and non-working residents, via the employee basic medical insurance (EBMI) and residents basic medical insurance (RBMI) programs, respectively. According to the National Healthcare Security Administration (NHSA), the BMI system covered 1.33 billion people—over 95% of China’s population—by the end of 2023.
However, the BMI system is highly fragmented. Both the EBMI and RBMI programs are not nationally or even provincially pooled, but are managed at the prefecture level, resulting in around 666 separate insurance pools across the country. This fragmentation leads to significant disparities in benefits due to varying local government fiscal capabilities, despite national standards set by the NHSA.
Public dissatisfaction has grown due to increasing personal contributions to the system. The NHSA has acknowledged this issue, attributing it to a slight fluctuation in participation rates.
Key Recommendations for Healthcare Insurance Reform
1. Establish a Unified Urban-Rural Medical Security System for the Elderly
Bi Jinquan, a former ministerial-level official, suggests creating a unified medical security system for the elderly. This system aims to address disparities, promote economic growth, and reform the existing structure to better meet the needs of an aging population. Key points include:
- Strengthening coordination of pooled funds and fiscal subsidies to focus on elderly care.
- Covering costs for generic drugs, standard treatments, inpatient care, and home care for the elderly over 65.
- Introducing supplemental commercial medical insurance for additional needs, funded voluntarily by individuals.
2. Improve Financing and Benefit Adjustment Mechanisms
Zhang Shoukuan, Vice Chairman of the Yunnan Provincial Committee of the CPPCC, offers recommendations to stabilize and enhance the financing of the basic medical insurance system:
- Develop a coordinated financing mechanism to stabilize participation without uniformly increasing personal contributions.
- Incentivize continuous insurance participation with differentiated contributions and benefits.
- Establish family accounts within the basic medical insurance system, allowing for shared use among family members and efficient fund management.
- Promote the coordination of medical services, insurance, and the pharmaceutical industry to enhance healthcare provision and cost management.
These proposed reforms aim to create a more equitable, efficient, and sustainable healthcare insurance system in China, addressing both immediate and long-term challenges. The outcomes of the Third Plenary Session will be crucial in determining the future direction of China’s healthcare policies.
