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Starting from September, all regions will gradually enter the centralized collection period for urban and rural residents' medical insurance. In 2025, the minimum individual payment standard for residents' medical insurance will rise to 400 yuan, and with fiscal subsidies, the funding standard for urban and rural residents' medical insurance will be 1,070 yuan.

On the 26th, the National Healthcare Security Administration, the Ministry of Finance, and the State Administration of Taxation issued the "Notice on Doing a Good Job in Basic Medical Insurance for Urban and Rural Residents in 2024" (hereinafter referred to as the "Notice").

The "Notice" stated that in 2024, governments at all levels will continue to increase subsidies for residents' medical insurance participation and premium payments. At the same time, the growth rate of residents' personal contributions will be appropriately reduced. The fiscal subsidies and personal contribution standards will increase by 30 yuan and 20 yuan respectively compared with the previous year, reaching no less than 670 yuan and 400 yuan per person per year.

This is the first time since 2016 that the new individual contribution standard is lower than the fiscal subsidy standard.

The financing of residents' medical insurance involves the "wallets" of nearly 1 billion people. The reporter of China Business News learned from people involved in policy formulation that the core of the annual document of urban and rural residents' medical insurance is to determine the financing standards for the next year. This year's notice fully considers factors such as rising medical expenses, greater downward pressure on the economy, and the slowdown in the growth of people's income. While the fiscal subsidy remains the same as last year, the increase in individual contributions has been reduced, responding to the expectations of insured persons for a smaller increase as much as possible.

Why do urban and rural residents' medical insurance premiums increase every year?

In the past one or two years, everyone from NPC deputies, CPPCC members to insured people and grassroots cadres have reflected through various channels that the individual payment standards for residents' medical insurance have increased too fast, the burden on residents is heavy, and it is more difficult to mobilize grassroots payments than before. They have suggested "slower increases" or "stopping increases."

Why do medical insurance premiums for urban and rural residents increase every year?

In its policy interpretation, the National Healthcare Security Administration stated that, against the backdrop of growing life expectancy and rising levels of medical consumption, reasonably raising individual payment and financial subsidy standards is an objective need to consolidate and improve benefit levels and ensure the smooth operation of the system.

Yicai learned in an interview that there are two main reasons for the annual increase in residents' medical insurance costs: one is the rapid increase in medical costs; the other is the rapid increase in residents' medical insurance benefits. These two factors have caused the pressure on urban and rural residents' medical insurance funds to continue to increase in recent years, and some areas have already seen residents' medical insurance funds' current revenues fall short of their expenditures. In this case, "slower increases" or "stopping increases" will further aggravate the gap between the fund's revenues and expenditures.

In recent years, my country's resident medical insurance fund has shown a "tight balance" state. In 2023, the resident medical insurance fund had an income of 1,056.971 billion yuan and an expenditure of 1,045.765 billion yuan, with a current balance of 11.206 billion yuan and a cumulative balance of 766.37 billion yuan.

The above-mentioned policy makers believe that the main reason for the "tight balance" of residents' medical insurance is that medical expenses are rising too fast. In recent years, my country's medical expenses have risen by more than 10% per year, far exceeding the growth of GDP and residents' disposable income. The 5% to 6% increase in residents' medical insurance funding cannot keep up with the increase in medical expenses.

There are reasonable factors for the increase in medical expenses, such as the aging population, changes in the disease spectrum, the application of a large number of new drugs and technologies, and the increase in people's health needs; there are also unreasonable factors, such as excessive diagnosis and treatment by medical institutions.

In the first half of this year, the gap between the income and expenditure of the residents' medical insurance fund has further narrowed. The "Main Indicators of Basic Medical Insurance Pooling Fund and Maternity Insurance from January to June 2024" released by the National Medical Insurance Administration on August 5 showed that the income of the basic medical insurance fund for urban and rural residents was 538.589 billion yuan, an increase of 1.5% year-on-year, and the expenditure was 537.191 billion yuan, an increase of 11.1% year-on-year. The fund income was only 1.4 billion yuan more than the expenditure. According to the current income and expenditure forecast, the basic medical insurance fund for residents will have a deficit in income in the second half of the year.

When my country's basic medical insurance system was first established, the fund management principle of "expenditure determined by revenue and balanced revenue and expenditure" was established, that is, expenditure was arranged according to the fund's income.

Jin Chunlin, director of the Shanghai Health and Health Development Research Center, told Caixin that the impact of tight funding for residents' medical insurance on medical institutions is that medical institutions will strengthen control over residents' medical insurance expenses and prevent overspending. Some hospitals will even choose to give priority to treating non-resident insured people.

Under universal health insurance, the medical insurance fund provides a stable source of funds for medical institutions. A local hospital director told Yicai that the hospital pays close attention to the increase in residents' medical insurance costs every year, because it will directly affect the hospital's income. If the funding standard for residents' medical insurance does not increase, medical institutions will face greater income pressure.

China Business News learned that when calculating the funding standards for residents' medical insurance, the medical insurance department will determine the funding standards based on indicators such as the price of medical services in the previous year, the negotiation of the drug catalog, the decline in the price of centralized procurement, and the matching degree of treatment levels. Controlling the rapid increase in medical expenses, standardizing the diagnosis and treatment behavior of medical institutions, and keeping medical expenses at a relatively reasonable growth are currently a major pressure on the management of residents' medical insurance.

Several people from grassroots medical insurance departments told Caixin that the rapid improvement in residents' medical insurance benefits is also an important reason for the substantial increase in urban and rural residents' medical insurance fund expenditures in recent years. Some benefits have even exceeded the scope of "basic protection" and are inconsistent with the funding level of residents' medical insurance.

Data from the National Medical Insurance Administration shows that the increase in medical insurance funding standards is due to the improvement in the level of medical insurance services. Over the past 20 years, the scope of residents' medical insurance has been significantly expanded, and the number of reimbursable drugs has increased from more than 300 in the early days of the New Rural Cooperative Medical Scheme to 3,088 now, including a variety of targeted drugs and drugs for rare diseases. At the same time, various modern medical examination and treatment technologies have become more accessible, and the reimbursement rate for medical treatment has increased significantly. At present, the reimbursement rate for hospitalization expenses within the policy scope of my country's residents' medical insurance remains at around 70%.

How to reduce the "pain" of paying fees

In the era of universal health insurance, not having health insurance is equivalent to putting yourself and your family at great risk. Once a serious illness occurs, the high medical expenses may overwhelm a family.

During its research in Jiangsu, Anhui and other places, China Business News learned that the insurance participation rate during the concentrated collection period reached more than 90%, and in some areas it was 95%, which shows that most insured persons recognize the necessity of medical insurance.

A medical insurance researcher told China Business News that my country's resident medical insurance is actually a very cost-effective system. It provides basic protection for hospitalization and serious illness with a funding standard of only about 1,000 yuan, of which the government bears two-thirds of the payment responsibility, and individuals only need to bear one-third. However, the current problem facing the resident medical insurance is that for a small number of insured people, the annual premium of several hundred yuan is indeed a considerable expense, and "cannot afford" is a real situation.

Resident medical insurance and resident pension are two types of taxes and fees that farmers need to pay directly with "real money" after agricultural tax. The "pain" of paying resident medical insurance is greater than that of paying urban and rural resident pension insurance, because resident pension is kept in the individual's own account, the ownership is their own, and minors under 18 and seniors over 60 do not need to pay resident pension insurance.

The residents' medical insurance requires payment for all age groups, from newborns to the elderly, and every insured person needs to make annual payments. Based on the law of large numbers in insurance, participating in the residents' medical insurance means "being protected when you are sick and benefiting others when you are healthy." Some insured people feel that they have suffered a loss after paying for medical insurance but have not fallen ill, so they are unwilling to participate in the insurance, or they participate selectively.

Liao Zangyi, associate professor at the School of Politics and Public Administration of China University of Political Science and Law, told Yicai Global that there are many reasons for residents to stop receiving medical insurance, and the burden of payment is only one of them. Stopping the increase in payment or even reducing the fee may cause more problems. The sustainable growth of the medical insurance fund is the basis for ensuring that the people's growing demand for basic medical services is met. Therefore, it is necessary to implement differentiated policies to ensure that the problem of basic medical insurance participation is solved.

One of the important measures to reduce the "pain" of paying premiums is to further increase the sense of gain of insured persons. This year's "Notice" once again clearly requires the steady improvement of the level of basic medical insurance, the enhancement of the precise protection capability of major disease insurance, and the strengthening of the protection of medical expenses for childbirth under the resident medical insurance.

Specific measures include: continuing to consolidate the level of hospitalization insurance, and stabilizing the fund payment ratio within the policy scope at around 70%; the maximum payment limit of residents' medical insurance superimposed on major disease insurance should in principle reach about 6 times the per capita disposable income of local urban and rural residents in the previous year; and the medical expenses related to prenatal examinations incurred by insured residents in outpatient clinics that meet the requirements should be included in outpatient insurance.

In order to increase the sense of gain of rural residents in participating in insurance, the "Notice" also proposes to include village clinics in the designated medical insurance management, ensuring that qualified village clinics are promptly included in the medical insurance settlement scope before the end of 2024, making it convenient for people to seek medical treatment and buy medicines at their doorsteps.

Another measure to reduce the "pain" of paying premiums is to expand the scope of mutual assistance of employee medical insurance personal accounts to close relatives. Employee medical insurance personal accounts can be used to pay the personal contributions of close relatives such as spouses, parents, children, siblings, grandparents, grandchildren, and grandchildren to participate in resident medical insurance. Close relatives participating in basic medical insurance can also use the personal accounts of related employee medical insurance participants to settle medical expenses when reimbursing medical expenses.

The "Notice" requires that the policy on family mutual aid use of employee medical insurance personal accounts be fully promoted and implemented. The National Health Insurance Administration will actively promote the further expansion of the geographical scope of mutual aid, strive to achieve mutual aid within all provinces before the end of this year, and accelerate the promotion of cross-provincial mutual aid next year.

As of August 15, Hebei, Hunan, Tibet and other provinces have expanded the scope of family mutual assistance for employee medical insurance personal accounts from "spouse, parents, and children" to "immediate relatives" in accordance with the latest document requirements of the State Council. The latest data from the National Medical Insurance Administration shows that from January to July 2024, 191 million people had family mutual assistance for employee medical insurance personal accounts, with a mutual assistance amount of 22.738 billion yuan.

(This article comes from China Business Network)