Summary of Key Points
The number of residents enrolled in the medical insurance program in China's urban and rural areas has been declining for seven consecutive years, with a total reduction of approximately 83 million people. The primary reason is the "regressive effect" of fixed-rate contributions—those with lower incomes bear a higher proportion of their income towards the insurance premiums, and the existing support mechanisms have not been able to fully offset this burden. As a result, the low-income families, rural elderly, and those with unstable employment are the most affected and are increasingly dropping out of the insurance program. Research teams suggest stabilizing the coverage rate and maintaining the fairness of the universal medical insurance system by providing targeted assistance to vulnerable groups, reducing the financial burden on the elderly, and enhancing the central government's financial support for regional disparities.
I. Why is the number of enrolled participants declining? Fixed-rate contributions put more pressure on low-income individuals
The medical insurance is voluntary, and everyone pays the same amount (for example, a minimum of 400 yuan in 2024). However, this one-size-fits-all approach has a significant impact on people with different incomes:
- The lower the income, the greater the burden: For the lowest 20% of the population in rural areas, the proportion of income allocated to insurance premiums has increased from 1.2% in 2003 to 7.4% in 2024, meaning they have to pay 7.4 yuan for every 100 yuan earned. In contrast, for the top 20% of the population, this proportion remains below 1%.
- Large families face greater challenges: A rural housewife in Anhui stated that a family of five has to pay 2000 yuan at once, which is a substantial amount for a low-income family.
- Regional disparities are significant: The elderly in central and western regions face particularly high premium pressures. In Shaanxi, the annual insurance fee is equivalent to 2.45 months of their basic pension, while in Jilin, it is 2.66 months; in Beijing and Shanghai, it is only equivalent to half a month's pension.
This phenomenon, where lower incomes result in heavier burdens, is what researchers refer to as the "regressive effect"—the medical insurance system, intended to help the poor, actually makes it more difficult for them to participate.
II. Who is dropping out of the insurance? The most vulnerable groups are the ones most affected
Surveys show that the main groups dropping out are those with the weakest ability to withstand the risks of illness:
- Low-income individuals: Among those who are not enrolled in the insurance, 58.67% have a monthly income of no more than 2000 yuan, and 36.67% cite "high premiums as unaffordable." A survey in Hunan found that 74.4% cited "low income and difficulty in paying premiums" as the primary reason.
- Rural elderly: There is no exemption from premiums for the elderly, and even those over 70 years old still have to pay several hundred yuan annually. For the elderly who rely on basic pensions, this amount can account for several months of their living expenses.
- Large families: Families with elderly members and children face higher total premiums and are more likely to give up enrolling.
- Unstable employment: The impact of AI and economic transformation on formal jobs leads to greater income volatility, making it difficult for these individuals to continue paying premiums.
These groups are precisely the ones who need medical insurance the most. Without it, they may face financial hardship if they fall ill, but they are forced to drop out due to the inability to pay.
III. Have the support mechanisms kept up? Vulnerable groups still cannot afford the premiums
China has medical assistance programs to help vulnerable groups enroll in insurance, but as premiums have risen, the level of support has not kept pace:
- Reduced funding standards: Previously, low-income and other disadvantaged groups were exempt from premiums. Now, only a fixed amount of assistance is provided. For example, low-income recipients in Zhengzhou, Henan, only pay 80 yuan (20% of the standard), while in Guizhou and Gansu, they still have to pay 300 yuan (70%-75%). The difference in contributions between similar disadvantaged groups varies significantly depending on where they live.
- Marginal groups are left out: Some families with low incomes do not meet the criteria for low-income assistance and receive no support. For instance, while Tianjin provides 90% subsidies to marginal low-income families, Fuzhou provides none, leading to their dropping out of the insurance program.
- Support has not increased with premium increases: As premiums have risen from 10 yuan to 400 yuan, the amount of assistance has not increased, leaving a larger portion of the cost to be borne by the vulnerable groups.
IV. How to stabilize the enrollment rate? Targeted assistance and central government support are key
Research teams have proposed several specific recommendations, with the focus on ensuring that those in need receive the help they deserve:
1. Zero out-of-pocket costs for low-income recipients: Include low-income recipients in the full subsidy program so they do not have to pay anything. After all, they are already among the most financially vulnerable.
2. Tailored subsidies for low-income groups: Set a low-income threshold at 60% of the national median income and provide three levels of subsidies:
- Families with income below 40% of the median receive full exemption.
- Families with income between 40% and 50% receive 75% of the cost subsidized.
- Families with income between 50% and 60% receive 50% of the cost subsidized.
This would cover more families who are in need but do not meet the low-income criteria.
3. Reduce the burden on the elderly: For example, Tengzhou, Shandong, exempts seniors aged 60-69 from half of their premiums, and Hanoi, Vietnam, also exempts them entirely. These practices are worth considering.
4. Where to find the funding? Central government support is necessary: Local governments are under significant financial pressure, and relying solely on them is unrealistic. The central government should increase subsidies for central and western regions and financially struggling areas, allocating funds based on the number of low-income residents and the degree of aging.
Conclusion
The decline in the number of enrolled residents in the medical insurance program is not simply a matter of "data cleaning" or "population structure changes"; it reflects a "fairness issue" in the system design. The most vulnerable groups are being excluded due to financial reasons. Solving this issue is not only about maintaining an 95% enrollment rate but also about ensuring that universal medical insurance truly covers everyone, providing peace of mind for everyone in case of illness, without the fear of giving up treatment due to lack of funds. This is the true purpose of the medical insurance system.