While adopting a basic medical insurance system for urban employees, China has established and improved a multi-level medical security system to reduce personal burdens on the insured individuals, said a white paper issued by the Information Office of the State Council on Tuesday.

In 1998, the Chinese government promulgated the "Decision on Establishing a Basic Medical Insurance System for Urban Employees" that combines social pool and personal accounts, according to the white paper titled China's Social Security and Its Policy.

The basic medical insurance program covers all employers and employees in urban areas, including employees and retirees of all government agencies, public institutions, enterprises, mass organizations and private non-enterprise units. People employed in a flexible manner can also participate in the basic medical insurance program.

By the end of 2003, some 109.02 million people around China had participated in the basic medical insurance program, including 79.75 million employees and 29.27 million retirees, the white paper said.

In the current system, medical expenses are shared by the medical insurance fund and the individual: Outpatient treatment fees (smaller amounts) are mainly paid from the personal account, while hospitalization expenses (larger amounts) are paid mainly from the social pool fund. The minimum and maximum payments from the social pool fund are clearly set out. The minimum payment is, in principle, about 10 percent of the average annual wage of local employees, and the maximum payment is about four times the average annual wage of local employees.

To meet the medical demands of different types of people covered by the insurance, a system of subsidies for large medical expenses has been set up to settle medical expenses exceeding the maximum limit of the basic medical insurance payment, said the white paper.

The state encourages enterprises to establish supplementary medical insurance for their employees, mainly for settling medical expenses not covered by the enterprise employees' basic medical insurance. A civil servants medical subsidy system has been established for civil servants and employees of public institutions who formerly enjoyed free medical services. The state is gradually establishing a social medical aid system mainly funded by the government to provide basic medical security for people with special difficulties.

Meanwhile, the state is promoting the reform of the basic medical insurance system, medical and healthcare system, and pharmaceuticals production and circulation system, to ensure that the insured enjoy necessary medical services, to curb unreasonable medical expenses, and to enhance the utilization efficiency of the basic medical insurance fund, said the white paper.

"The reform of China's medical insurance system faces many heavy tasks," the white paper said.

In the future, the state will further expand the coverage of medical insurance to steadily include eligible people in all kinds of employment in urban areas in the basic medical insurance scheme.

China will improve a multi-level medical security system, gradually lessen personal burden on the insured, and realize the stable operation and sustainable development of the medical insurance system, said the white paper.

Source: Xinhua