JANUARY

CHINA
Private health insurance: Complementary private health insurance is purchased to cover deductibles,
copayments, and other cost-sharing, as well as coverage gaps, in publicly financed health insurance, which
serves as the primary coverage source for most people. Private coverage is provided mainly by for-profit
companies. In 2014, total premiums collected amounted to CNY158.7B (USD43.4B), an increase of 45 percent
compared to the prior year, and represents approximately 10 percent of total (public and private) health
insurance spending (Zhao et al., 2015; Liu, 2015).
Purchased primarily by higher-income individuals and by employers for their workers, private insurance often
enables people to receive better quality of care and higher reimbursement, as some health services are very
expensive or not covered by public insurance. There are currently no statistics on the percentage of the
population with private coverage, but the Chinese government is encouraging development of this market.
Growth in private coverage has been rapid, with some foreign insurance companies recently entering
the market.
What is covered?
Services: Publicly financed insurance covers primary, specialist, emergency department, hospital, and mental
health care, as well as prescription drugs, and traditional medicine. A few dental services (e.g., tooth extraction,
but not cleaning) and optometry services are covered, but mostly they are paid for completely out-of-pocket.
Home care and hospice care are often not included either. Local health authorities define the benefits package.
Preventive services such as immunization and disease screening are included in a separate public-health benefits
package funded by central and local government; every citizen and migrant is entitled to these without
copayments or deductibles. Coverage is person-specific; there are no family or household benefit arrangements.
Cost-sharing and out-of-pocket spending: Inpatient and outpatient care, including prescription drugs, is subject
to different deductibles, copayments, and reimbursement ceilings. There are no annual caps on out-of-pocket
spending. In 2013, out-of-pocket spending per capita was CNY2,327 (USD636) to CNY3,234 (USD886) and
CNY1,274 (USD348) in urban and rural areas, respectively—representing about 34 percent of total health
expenditures (National Health and Family Planning Commission, 2014).
Most out-of-pocket spending is for prescription drugs. Reimbursement ceilings are significantly lower for
outpatient care than for inpatient care. For example, in 2013, ceilings were CNY3,000 (USD820) for outpatient
care and CNY180,000 (USD49,180) for inpatient care in the rural new cooperative medical scheme in Beijing.
Provider networks are specific to the insurance scheme, normally at the prefecture-level for urban employmentbased
basic health insurance and urban resident basic health insurance (which may share the same network,
but with different benefits) and at the county-level for new cooperative medical scheme. People can use out-ofnetwork
health services (even across provinces), but these have higher copayments. There are no universal
cost-sharing arrangements, and each risk-pooling unit (network) has its own policies. Cost-sharing in primary care
facilities (village clinics, rural township hospitals, and urban community hospitals) and secondary/tertiary hospitals
is also different, with the lowest copayments in the former. Secondary and tertiary hospitals are accredited by
the local health authorities based on their qualifications, and both provide primary care, outpatient specialists,
and inpatient hospital care. Migrant populations face much higher cost-sharing and out-of-pocket spending,
since they often use care out-of-network. Fee schedules for primary and secondary care are regulated by the
local health authorities and the Bureaus of Commodity Prices, and it is unlawful to charge patients above the
fee schedules.
Safety net: For individuals who are not able to afford individual premiums for publicly financed health insurance
or out-of-pocket spending (which is not capped), a medical financial assistance program, funded by local
governments and social donations, serves as safety net in both urban and rural areas. In Beijing, the individual
poverty level in 2015 was defined as CNY670 (USD183) per month in rural areas and CNY710 (USD194) in urban
areas; poverty levels for other provinces may be lower than Beijing. Medical financial assistance programs
prioritize inpatient care expenses. Funds are mainly used to pay for individual deductibles, copayments, and
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The Commonwealth Fund