Wenyi Zhang
Research expert covering Greater China
Health insurance in China - statistics & facts
Before the 1980s, China's medical security system mainly consisted of a fully subsidized health program for urban workers and civil servants, and a commune-based cooperative healthcare scheme in rural areas. Since the economic reform marking the end of China’s planned economy, the marketization of the healthcare sector led to a complete overhaul of the medical security system, resulting in a publicly funded basic medical insurance program now covering over 95 percent of the Chinese population, supplemented by commercial health insurance providers and a medical aid scheme.
The employee basic medical insurance program is mainly funded by mandatory contributions of the employees and their employers, with employees contributing around two percent of their monthly salaries into their personal accounts, covering the expenses of most outpatient services. Outpatient bills for serious diseases, inpatient care, and surgeries are reimbursed through the pooled fund, which is financed by mandatory contributions from employers. The more adequate funding allows the program to cover better medical treatments and provide a higher rate of reimbursement than the resident medical insurance program, which is funded solely by the insurance premiums paid by the participants.
On top of the gap between the urban and rural areas, economic disparities between different provinces also intensified the inequalities in access to healthcare services among Chinese patients, as fewer drugs and procedures are covered by medical insurance programs in less developed regions. Combined with substantial regional imbalances in medical resources and standards, providing universally accessible, high-quality, and affordable services for every citizen remains a major challenge for the Chinese healthcare system in the years to come.
Two insurances based on employment status
China’s basic medical insurance system consists of two types of insurance. Employees and pensioners who were employed for more than 15 years before retirement are insured under the employee basic medical insurance program, while other citizens such as children, students, and residents in rural areas are covered by the urban and rural resident basic medical insurance program.The employee basic medical insurance program is mainly funded by mandatory contributions of the employees and their employers, with employees contributing around two percent of their monthly salaries into their personal accounts, covering the expenses of most outpatient services. Outpatient bills for serious diseases, inpatient care, and surgeries are reimbursed through the pooled fund, which is financed by mandatory contributions from employers. The more adequate funding allows the program to cover better medical treatments and provide a higher rate of reimbursement than the resident medical insurance program, which is funded solely by the insurance premiums paid by the participants.
Urban-rural gap and regional inequalities
For decades, residents in China’s vast rural areas were inadequately covered by the country’s medical security system. In 2000, only about ten percent of rural residents were enrolled in the rural cooperative medical scheme, and most patients had to resort to personal savings for medical treatments. Minor illnesses were often ignored, while unaffordable treatments for serious conditions became a major cause of poverty. This situation only gradually improved after the introduction of the new rural cooperative medical scheme, and its recent incorporation into the urban and rural resident basic medical insurance program. Nevertheless, rural residents still generally receive inferior medical treatments and lower reimbursement rates for medical expenses than their urban counterparts, especially those who are insured through the employee medical insurance program.On top of the gap between the urban and rural areas, economic disparities between different provinces also intensified the inequalities in access to healthcare services among Chinese patients, as fewer drugs and procedures are covered by medical insurance programs in less developed regions. Combined with substantial regional imbalances in medical resources and standards, providing universally accessible, high-quality, and affordable services for every citizen remains a major challenge for the Chinese healthcare system in the years to come.
