The central authorities declared recently that serious illness insurance will cover up to and above 50 percent of patients medical costs. The money will come from the surplus cash in basic medical insurance funds, says an article in 21st Century Business Herald. Excerpts:
It is certainly good news for all Chinese. Yet, as China faces an aging society and increasingly younger chronic disease patients, the cash will soon run out. The surplus cannot serve as a sustainable capital source for serious illness insurance.
The only sustainable source of serious illness insurance is from private insurance, but young people can be reluctant to pay for the cover. To counter this, insurance agencies can make their policies more flexible to appeal to people of different ages.
For example, insurance agencies can establish the insurance partially as an investment program for the applicants.
The government can also create favorable policies for applicants of these insurance policies to encourage the public to recognize the importance of insurance. But the government should not act as the main party in charge of shouldering these costs.
