CRI听力:China Expands Health Insurance to Cover Severe Cases

Chen Jianguang is a farmer in east China's Jiangsu Province. He has spent between 800 to 900 thousand yuan on medical care for his ill son. Now he has run out of money to pay his wife's health care bills.

Economic professor Liu Guo'en leads the Health Economics and Management Institute at Peking University. He says Chen's story is not an unfamiliar one in China.

"Medical care that is not covered by the basic insurance program can be a big financial burden that drives people into poverty and makes middle-income people poor."

Although more than 95 percent of Chinese were covered by basic health-insurance program at the end of last year, those with serious illnesses had, and still have, barely any coverage at all.

Now the new policy guidelines say when medical expenditures exceed a city's annual per capita income, the new program will reimburse at least half of the portion that is not covered by the existing health insurance system.

And if local budgets can afford this, people won't need to pay anything extra.

Li Yaoguang is an official from the health reform office under the State Council.

"The policy was made based on the principle of zero extra burdens. That means the new program will not charge patients."

The way to realize this is to use government health insurance funds to purchase commercial insurance.

Peking University health care economist Liu Guo'en suggests the way the insurance is paid must be changed to encourage insurers to tap into this business voluntarily, as the scheme could easily lead to excessive treatment and drug over-prescriptions.

"Paid according to a disease, for example, or capitation… the incentives for both medical providers and insurers can be somewhat consistent. Therefore, they will have incentives to save money and not over-provide medical care against the insurers' wishes."

Liu Guo'en also suggests the government keeps the business transparent and fair to select the most qualified applicants.

China's three-year-old medical reforms have encouraged the private sector to enter the health care sector to ease shortages of hospitals and medical staff and reduce sky-high medical costs.

Local governments are being tasked with localizing the new policy.

Several cities, including Chen Jianguang's hometown, Taicang, have tried the policy for months. Now the policy is going national.

The farmer says it has really helped his family a lot.

For CRI, I'm Su Yi.