Data from the Ministry of Human Resources and Social Security (MOHRSS) shows that as of the end of 2016, the medical savings accounts in the urban employee basic medical insurance totaled 520 billion yuan, doubling from four years ago. Some experts argued that the large amount of precipitation funds reflects the low efficiency of the fund. They suggested reasonably expanding the coverage of medical savings accounts and gradually reducing the proportion of insurance premiums paid by employers in medical savings accounts.
The 2016 statistical bulletin for the development of human resources and social security shows that the total revenues of the urban employee basic medical insurance came at 1,308.4 billion yuan in 2016, while its total expenditures were 1,076.7 billion yuan. As the end of 2016, the balance in the social pooled funds was 976.5 billion yuan; while that in medical savings accounts was 520 billion yuan, almost doubling from the figure (269.7 billion yuan) as the end of 2012.
The premiums of the urban employee basic medical insurance in China are composed of two parts: social pooled funds and medical savings accounts. According to policies introduced in 1998 (the central government has fixed the rate for annual premiums for the urban employee basic medical insurance at 8 percent of payroll), employers pay a 6 percent payroll, and employees pay an additional 2 percent. The medical savings account is made up of 30 percent of the employer share and the total of the employee share. In practice, all local governments adopt close-off management medical savings account which is used to pay for outpatient expenses, medicines and other fees below the deductible; while the social pooled funds are used to pay hospitalization expenses.
“On the one hand, the social pooled funds are running out; on the other hand, there is a large amount of balance in medical savings account. This restricts the health and sustainable development of the urban employee basic medical insurance program.”
Some experts pointed out that the large amount of precipitation funds reflects the low efficiency of the funds. Meanwhile, the operation of the social pooled funds is not optimistic. The funds in some provinces have seen deficit.
In fact, due to some restriction, the funds in some employees’ medical savings accounts have precipitated for a long time. There have emerged needs for using medical savings accounts to buy things other than medicines or for cashing. Some retail drug stores catered the needs for cashing. According to statistics made by the National Audit Office, 140 billion in medical savings accounts were withdrawn or used to buy daily necessities in 539 drug stores from 2015 to the first half year of 2016.
To solve this problem, some local governments allow one to share medical savings account with family members, or use it to buy commercial health insurance or use it to pay for health examination service, buy health cards or other fitness services. Local policies and administration on the medical savings account are caught in chaos.
“Originally, the medical savings account is designed to control health service fees and accumulate fund. As some local regulations on medical savings account are not complete, some may use their medical savings accounts in emergencies or buy daily necessities. Some have lots of savings in their accounts, while some may find money in their accounts not enough,” Chu Fuling, head of the social security research center of the Central University of Finance and Economics, told the Business Information Daily.
There are also disputes surrounding the abolishment medical savings account from the perspective of its fairness and efficiency. Some experts hold that the medical savings account system has defects as it cannot disperse risks, and so its fairness and efficiency need more discussion. Meanwhile, the system requires high cost, and it is a waste to lay these funds in idle, which is a hidden loss. Therefore, the medical savings account should lessen or be abolished.
Some experts argue that although the local policies and administration on the medical savings account are now in chaos, there is still need for medical savings account. Professor Yang Yansui from the employment and social security research center of the School of Public Policy and Management of Tsinghua University said in an interview with Business Information Daily that the government should reasonably expand the coverage of medical savings accounts, gradually reduce the proportion of insurance premiums paid by employers in medical savings accounts and increase about 2 percent of the payroll in social pooled funds to improve the payment capability of the social pooled funds.
Chu suggested regulating the use of medical savings account and allowing family member to share medical savings. “China’s health insurance system used to be based on real-time payment. At that time, a part of outpatient or hospitalization fees can be reimbursed, which results in a surge in outpatient fees. Later, most local governments only offer reimbursement for hospitalization fees, causing a dramatic rise in hospitalization rate and a rise in medical expenses. Therefore, a system is established which specifies that medical savings account should be used to pay outpatient fees, while the social pooled funds to pay hospitalization fees.”
Chu believed that if medical savings account is canceled, outpatient fees will surely surge. He suggested establishing uniform funds for large amount of outpatient fees. He also suggested opening medical savings account (directly allow employees to use the medical savings account) and allowing employees to pay outpatient fees with their own medical savings accounts. In doing this, it can not only reduce management costs but also control outpatient fees. It is a path of reform that needs exploration,” Chu said.
Translated by Coral Zhong
The 2016 statistical bulletin for the development of human resources and social security shows that the total revenues of the urban employee basic medical insurance came at 1,308.4 billion yuan in 2016, while its total expenditures were 1,076.7 billion yuan. As the end of 2016, the balance in the social pooled funds was 976.5 billion yuan; while that in medical savings accounts was 520 billion yuan, almost doubling from the figure (269.7 billion yuan) as the end of 2012.
The premiums of the urban employee basic medical insurance in China are composed of two parts: social pooled funds and medical savings accounts. According to policies introduced in 1998 (the central government has fixed the rate for annual premiums for the urban employee basic medical insurance at 8 percent of payroll), employers pay a 6 percent payroll, and employees pay an additional 2 percent. The medical savings account is made up of 30 percent of the employer share and the total of the employee share. In practice, all local governments adopt close-off management medical savings account which is used to pay for outpatient expenses, medicines and other fees below the deductible; while the social pooled funds are used to pay hospitalization expenses.
“On the one hand, the social pooled funds are running out; on the other hand, there is a large amount of balance in medical savings account. This restricts the health and sustainable development of the urban employee basic medical insurance program.”
Some experts pointed out that the large amount of precipitation funds reflects the low efficiency of the funds. Meanwhile, the operation of the social pooled funds is not optimistic. The funds in some provinces have seen deficit.
In fact, due to some restriction, the funds in some employees’ medical savings accounts have precipitated for a long time. There have emerged needs for using medical savings accounts to buy things other than medicines or for cashing. Some retail drug stores catered the needs for cashing. According to statistics made by the National Audit Office, 140 billion in medical savings accounts were withdrawn or used to buy daily necessities in 539 drug stores from 2015 to the first half year of 2016.
To solve this problem, some local governments allow one to share medical savings account with family members, or use it to buy commercial health insurance or use it to pay for health examination service, buy health cards or other fitness services. Local policies and administration on the medical savings account are caught in chaos.
“Originally, the medical savings account is designed to control health service fees and accumulate fund. As some local regulations on medical savings account are not complete, some may use their medical savings accounts in emergencies or buy daily necessities. Some have lots of savings in their accounts, while some may find money in their accounts not enough,” Chu Fuling, head of the social security research center of the Central University of Finance and Economics, told the Business Information Daily.
There are also disputes surrounding the abolishment medical savings account from the perspective of its fairness and efficiency. Some experts hold that the medical savings account system has defects as it cannot disperse risks, and so its fairness and efficiency need more discussion. Meanwhile, the system requires high cost, and it is a waste to lay these funds in idle, which is a hidden loss. Therefore, the medical savings account should lessen or be abolished.
Some experts argue that although the local policies and administration on the medical savings account are now in chaos, there is still need for medical savings account. Professor Yang Yansui from the employment and social security research center of the School of Public Policy and Management of Tsinghua University said in an interview with Business Information Daily that the government should reasonably expand the coverage of medical savings accounts, gradually reduce the proportion of insurance premiums paid by employers in medical savings accounts and increase about 2 percent of the payroll in social pooled funds to improve the payment capability of the social pooled funds.
Chu suggested regulating the use of medical savings account and allowing family member to share medical savings. “China’s health insurance system used to be based on real-time payment. At that time, a part of outpatient or hospitalization fees can be reimbursed, which results in a surge in outpatient fees. Later, most local governments only offer reimbursement for hospitalization fees, causing a dramatic rise in hospitalization rate and a rise in medical expenses. Therefore, a system is established which specifies that medical savings account should be used to pay outpatient fees, while the social pooled funds to pay hospitalization fees.”
Chu believed that if medical savings account is canceled, outpatient fees will surely surge. He suggested establishing uniform funds for large amount of outpatient fees. He also suggested opening medical savings account (directly allow employees to use the medical savings account) and allowing employees to pay outpatient fees with their own medical savings accounts. In doing this, it can not only reduce management costs but also control outpatient fees. It is a path of reform that needs exploration,” Chu said.
Translated by Coral Zhong
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