Understanding a Paradox in the Social Health Insurance Reform in China
For developing nations, there is a crucial issue of concern for health policy development: how to mobilize and manage financial resources for health systems. Among the major designs of health schemes, two stand out as competing options: social health insu
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Understanding a Paradox in the Social Health Insurance Reform in China
For developing nations, there is a crucial issue of concern for health policy development: how to mobilize and manage financial resources for health systems. Among the major designs of health schemes, two stand out as competing options: social health insurance (SHI) and a tax-based system (e.g., the National Health Service in the United Kingdom). Nevertheless, a wave of SHI initiatives has swept across many developing countries in recent years (Hsiao and Shaw 2007; Wagstaff 2007). SHI, as an approach to financing the mobilizing of funds and the pooling of risk, is seen by many health planners as a “magic” solution to health financing and delivery problems (Hsiao and Shaw 2007).
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Social Health Insurance in China
SHI has made remarkable progress in China from the end of the 1990s to the beginning of the 2010s, alongside the restoration of Chinese social security systems under economic transition from a planned to a market economy. The main efforts of SHI reform focus on replacing the traditional with new types of insurance schemes and expanding the new schemes to the population nationwide (Wong et al. 2006). The SHI system has undergone a major transition since the foundation of the People’s Republic of China in 1949. Before the large-scale health insurance reform starting at the end of 20th century, China implemented the Government Medical Insurance (GMI) for employees in government and public institutions, the Labor Insurance for workers in state-owned enterprises, and the Cooperative Medical Scheme for rural residents. These former schemes were established in accordance with collectivism and the planned economy that was implemented from 1949 to around 1978. As the emerging marketization reform ruined the political, social, and economic basis of these schemes, they gradually collapsed, leaving 47 % of all residents and 87 % of rural residents with no health insurance in 1998 (Wang 2005). © Springer Nature Singapore Pte Ltd. 2016 K. Liu, The Effects of Social Health Insurance Reform on People’s Out-of-Pocket Health Expenditure in China, DOI 10.1007/978-981-10-1777-3_1
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As a developing country with the largest population in the world, China’s healthcare system was under tremendous pressure. To protect people’s financial risks due to serious health cost inflation, the Chinese government chose the SHI model to reinvent healthcare financing. In 1998, the state established the Urban Employee Basic Medical Insurance (UEBMI) for employees with formal relationships with employers in urban areas, replacing the traditional Labor Medical Insurance (State Council 1998). In 2003, the New Cooperative Medical Scheme (NCMS) was enacted by the state to cover rural residents, replacing the traditional Cooperative Medical Scheme (General Office of State Council 2003). In 2007, the state piloted the Urban Resident Basic Medical Insurance (URBMI) for urban residents without employment, such as the el
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