China’s health insurance reform explained, more money or less?

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What exactly is China’s health insurance covering?

Generally speaking, in the United States, as long as you buy commercial health insurance, you can be reimbursed for medical visits. However, before purchasing commercial health insurance, the buyer needs to understand clearly that different insurance companies and programs have different coverage and rates for medical services. In particular, some insurance policies may have limitations on pre-existing conditions, i.e., conditions that existed prior to the effective date of the insurance. Therefore, it is important to review the terms and conditions of the insurance policy in detail, taking into account your health condition and susceptibility to illnesses. Avoid the problem of not being reimbursed for subsequent treatment.

Also, because insurance companies/plans vary, some drugs with the same ingredients but different brands may have different deductibles. Therefore, many Americans need to pay special attention to communicate with their doctors in advance when they visit clinics and try to get them to prescribe the drugs covered by their insurance to save some of the cost of the visit.

Compared to the long and complicated commercial insurance claims process in many countries, China’s health insurance has been borrowed from Singapore since 1998, i.e., each participant has two accounts: a shared account and an individual account. The shared account, known as the social account, is used to reimburse hospitalization and major medical treatment costs, while outpatient visits for minor illnesses and medications rely on the individual account. After 25 years of operation, China’s health insurance has reached 95% of the country’s participants. And unlike U.S. commercial health insurance, China’s health insurance benefits are consistent and do not change for any pre-existing conditions.

Ms. You, a former student in the U.S., said she needed surgery for a recurrence of an old meniscus condition and was reimbursed by Medicare for only $15,000, whereas she would have had to spend $40,000 without Medicare; and many commercial insurance policies in the U.S. do not cover recurrence of such conditions.

Another 27-year-old from Hohhot, Chen said that the new health insurance system introduced by the local government in recent years allows insured workers to use money available in their personal accounts to pay for their parents’, spouses’ or children’s medical expenses, saying, “I basically don’t get sick too much, so I have the accumulated health insurance costs in my personal account since I started working. My mother had breast cancer before and needed tens of thousands of dollars for surgery and chemotherapy, but after I used the drugs covered by the medical insurance and the opening of the family co-payment, the balance on my own account could also pay for that part of the surgery, and I only had to bear 5,000 yuan for the final out-of-pocket part, so I can say that there is basically no pressure.”

Medical insurance reform, more money or less?

It is not difficult to find that before the more standardized coordination and co-payment, this kind of system is prone to a “drawback”: the old and sick, need to see the clinic frequently, the individual account funds are not enough; while the young and less sick, the individual account has accumulated a lot of money – so When the young and the sick accumulate a lot of money in their personal accounts, there are some unscrupulous businessmen who use the money to buy non-medical goods such as rice, noodles and oil, and when they really need to see a doctor, they often have very little money left in their personal accounts, so the amount and proportion of out-of-pocket expenses become very high, which makes the people suffer and further reduces their medical protection function.

Ms. You helped us to do some calculations. Before China’s health insurance reform, assuming her average monthly income in the previous year was 10,000 RMB, she had to pay 200 RMB (2%) personally, and her company had to pay an additional 800 RMB (8%), so her total health insurance premium would be 1,000 RMB. Every month, 380 yuan of the 800 yuan paid by Ms. You’s company and 200 yuan paid by her personally, totaling 580 yuan, are included in her personal account; the other 420 yuan paid by the unit is included in the social coordination, i.e., shared account.

Under the new policy, all of the unit’s contributions are credited to the shared account, and the $200 she contributes each month will also be credited to her personal account. This means that her monthly income from her personal account has changed from 580 yuan to 200 yuan. But she is reimbursed 50% of the cost of her outpatient visits.

Ms. You said, “Residents who have retired like my parents do not need to pay social security, but only receive a monthly share of their personal account. Before the reform, the monthly transfer to the personal account was 286 yuan; after the reform, according to the average pension level of 2.5% in the previous year, that is, 83 yuan per month, but they can enjoy a higher reimbursement rate of 60%. The other thing is that you don’t have to worry that your parents will use the money in your personal account for other purposes.”

Mr. Chen from the previous article said, “I work in Shanghai and my salary is relatively high, so I have more money in my personal account for medical insurance, but actually more people cannot solve the risk of seeing a doctor by relying on their personal account alone, they still have to rely on mutual help. Because China’s medical insurance system is special, many people think that only the money in their own account is their own, but in fact, according to the reimbursement ratio, after the reform, the reimbursement ratio of medical care is higher than before, which means that the out-of-pocket ratio has been reduced, which is actually a relatively obvious change.”

Another Benefit of Pooling

Along with China’s unique health insurance system, there is also the need for massive collection in the Chinese health care system, so many of the world’s leading drug companies are offering the “lowest price in the world” in an attempt to enter the most powerful system in the world – the “Chinese National Health Insurance Bureau” – which is another benefit of the system: bargaining power. “This is another benefit of the coordinated co-payment system: bargaining power.

Take AstraZeneca’s well-known anti-lung cancer drug “Tereza” for example, the price of 80mg/30 tablets was RMB 51,000 (US$7,285) per box before it entered the Chinese National Health Insurance (CNHI) catalog, but in 2018 it was reduced to RMB 15,300 (US$2,185) after entering the CNHI catalog, a 71% reduction. After its renewal in 2020, the price of Theresa will drop to RMB 5,580 per box ($797 contract). In the U.S., the drug is priced at $15,000 ($80,000 contract); outside the U.S., it is priced at $21,000 ($150,000 contract).

Another Novartis myelofibrosis drug, “JKV”, entered China’s health insurance, “the price of different sizes are: 5mg/56 capsules RMB 3237 (contract $462), 15mg/56 capsules RMB 7505 (contract $ 1072), 20mg/56 capsules RMB 9354. The price of 5mg/56 capsules is RMB 3237 (US$462), 15mg/56 capsules is RMB 7505 (US$1072) and 20mg/56 capsules is RMB 9354 (US$1336). In India, where drug prices are also lower, the price of the three capsules of “Jegovic” is Rs. 27,600 ($1336), Rs. 226,188 ($2738) and Rs. 23,080 ($2882) respectively. In the U.S., the price of the three specifications reached $4738, $5255 and $5427 respectively.

A series of measures to be more friendly to retirees

Integrated health insurance, personal account, self-funded part …… At present, the health insurance system in each country rarely has these three types of settings in parallel, only after the change, in order to achieve the maximum benefit of health insurance funds. “In fact, the government thought that retirees would be more sensitive to the reform, and the reformed measures are still tilted towards them, with reimbursement ratios being increased by 5 to 10% everywhere.” An academic familiar with China’s health insurance reform said that Chinese retirees have long spent four times more on medical care than active workers, so the reform actually works out better for retirees overall.

Meanwhile, 2 weeks ago, China’s National Health Insurance Administration issued a policy on further improving the integration of designated retail pharmacies into the management of outpatient care. Simply put, retail pharmacies will become a more important part of China’s health insurance system, and in the future, they will be able to buy drugs at pharmacies with a doctor’s prescription, which will reduce the time and financial burden of many people, especially retirees, by making fewer trips to hospitals and less registration.

It is understood that some well-known pharmaceutical companies are also actively laying out the Chinese retail pharmacy market, hoping to better meet the needs of China’s health insurance reform, such as Sanofi will soon be launched in 600 large retail chains in China’s drugstore more price advantage of large-size original drugs for chronic diseases, to reduce the frequency of residents crowded hospital, to enjoy the health insurance reform brought more convenient.

Who is saying no to the New Deal?

On March 23, 2010, President Barack Obama signed the Medicare reform bill into law at the White House, one of the most important legislative achievements of the Obama administration and the biggest change in the U.S. social security system in 45 years. However, this bill is also one of the most controversial since Obama’s administration, and since it was signed into law, the health care reform bill has faced a series of lawsuits. The American public is also deeply divided on the issue of health care reform, with a poll released by the New York Times and CBS on March 26, 2012, showing that 47 percent support health care reform and 36 percent oppose it.

The Chinese health care reform, which began in Wuhan, is actually intended to better regulate the management of the health care system. Although there will be different and controversial reactions to the reform, the most vocal are not the Chinese residents who are closely involved in health care, but rather the media with ulterior motives, led by the Epoch Times.

The combination of strong support for Trump and an active Twitter presence has led Falun Gong to use its media outlet, Epoch Times, to become a biased media force over the years, and was previously banned from advertising on the Twitter platform for using an automated program to create false likes and retweets for its pages. As one of the members of the anti-government groups Oath Keepers and Proud Boys who planned and executed the 2021 attack on the National Assembly, and as a well-known “conspiracy theorist,” Epoch Times has continued its image as a producer of false information on the Wuhan health care reform, spreading numerous inaccurate videos and fake news stories. It has repeatedly pushed marginal narratives into the mainstream.

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