Farmers see benefits of medical insurance
By Zheng Feng (China Daily)
Updated: 2004-11-05 22:26

Trying to end a decades-old medical practice that has ignored the health of millions of farmers, the Chinese Government is introducing a new insurance system in rural areas. Zhang Feng examines what efforts have been made

NANCHANG, JIANGXI: It is the first time that Wang Senyan, a farmer in Central China's Jiangxi Province, has been able to enjoy the benefits of an insurance system in his 27 years.

In August, he broke one of his fingers in a motorbike accident at hometown, Qiukou Town of Wuyuan County, four hours' from Nanchang, the capital city of Jiangxi Province.

"I only got 96.6 yuan (US$11) in the end, but I was quite happy with that," Wang said.

The system, a new type of rural medicare insurance service, has been piloted in the county since August by the local government.

Under the scheme, farmers pay 15 yuan (US$1.8) for medical insurance.

Central and local governments contribute an additional 10 yuan (US$1.2) for each farmer .

Of the total premium, 10 yuan is put into an account to help Wang pay for outpatient services with some minor diseases in village clinics.

The rest goes to a pool for rural cooperative medicare.

If farmers fall ill, part of their medical expenses are covered by the fund. It cost Wang 1,319 yuan (US$160) to have his broken finger treated at the only county-level hospital in Wuyuan.

This is nearly 25 per cent of his annual income of about 5,000 yuan (US$600), which he earns in a clothing factory in Wenzhou city, in East China's Zhejiang Province, as a farmer-turned worker.

His annual income about the same as a well-educated employee in big cities like Beijing and Shanghai would earn in a month.

His family earns little extra from their farming, Wang said.

In Wang's case, the first 600 yuan (US$72) was deducted from the medical bill, which includes the cost of medicines and examinations which are not covered by the system. Wang had to pay for these himself.

Twenty per cent of the rest of the money is reimbursed by the system, which is 96.6 yuan (US$11).

The county's insurance policy only contributes to medical bills exceeding 600 yuan in county-level hospitals, or 300 yuan in township-level hospitals.

In this way farmers are encouraged to see doctors in township hospitals if they are equipped to treat the problem preventing a rush to county-level hospitals that may crash the fund.

The bottom line must be drawn because as yet the insurance system is not strong enough, said Cheng Hongliang, director of the Health Bureau of Wuyuan County.

Main function

Reimbursements will be bigger if medical costs are, Cheng said.

If the cost is between 20,000 yuan (US$2,400) and 30,000 yuan (US$3,600), the reimbursement rate will increase to 50 per cent.

But because as yet not many people have bought into the system, there is a shortage of funds available for reimbursement. Of the 15 yuan (US$1.8) that each farmer currently pays, just five is use for hospital treatment and the rest goes to outpatient services.The central government says farmers should not pay more than 0.8 per cent of their annual income into this system.

Wang's family of eight pay a total of 120 yuan (US$14) a year.

Wang is the first to benefit from the system.

"I now know from experience how it can work for us, and in the future I know how it will help the family," Wang said.

Actually Wang is not the only farmer in Wuyuan to have benefited from the new system.

By the end of September, 48,782 farmers in Wuyuan claimed pay-outs of 5.38 million yuan (US$640,000).

More than 85 per cent of the 266,000 farmers in Wuyuan have joined the system, pooling 7.98 million yuan (US$960,000).

The remaining 2.6 million yuan (US$310,000) in the fund will be put towards next year's budget, when it's time to collect in the year's premiums. Wuyuan's special office in charge of the fund plans to raise the pay-out rate gradually in the coming years, Cheng said.

Meanwhile, the office is also widening the scope of diseases that are partially covered by the insurance.

Traffic accident injuries and crime victims will also be covered, as well as some serious illnesses such as cancer and heart and brain disease.

"The intention is that every penny we gather in from premiums is in turn paid out for farmers' medical care," Cheng said.

A special committee has been set up, including representatives from the local people's congress, to strengthen supervision of the fund management.

Initial achievements

In Jiangxi, the ongoing pilot project is in force in seven counties including Wuyuan, with a total of 2.48 million farmers. As of September, 88 per cent them had joined the system.

Latest statistics suggest that by the end of June, the insurance had covered 68.99 million rural residents in the whole country.

The fund has reached 3.02 billion yuan (US$364 million) in China, with its population of 1.3 billion and nearly 900 million rural residents.

The annual per capita income is about 2,500 yuan (US$300) in Wuyuan, which is quite good for Jiangxi Province, said Huang Shengui, deputy director of the county's health bureau.

On average, a farmer in Wuyuan spends about 60 yuan (US$7) a year in medical treatment.

Unlike most urban workers, who enjoy government subsidies or are covered by medical insurance, villagers have to pay medical expenses themselves.

Unable to afford good doctors, they are treated by village doctors or even use a form of witchcraft, but still find themselves in a lot of debt and often give up treatment.

Few rural people have regular physical check-ups in their daily lives.

But now, encouraged by the new medical insurance system, older people are choosing to seek medical help at hospitals, Huang said.

What's more important, he added, the system can ensure rural residents live longer and lead healthier lives.

One farmer in Fenshui Village in Wuyuan spent more than 20,000 yuan (US$2,400) on treating his illness. Without the help of the new system, he said he would have given up treatment a year ago.

Farmers are tending to go to the best hospital in the county, the Wuyuan People's Hospital.

Before August 2003, only 70 per cent of the beds in the hospital were filled.

Now beds are in short supply. Because child-birth is also covered by the system in Wuyuan, more women now prefer to give birth in hospital.

Voluntary membership of the system certainly seems to be getting popular.

Relevant and vital factors

In rural areas, a big obstacle to a sound medical service is the high price of medicines.

Farmers have to pay ten or more times the original medicine price, according to Qi Hua'an, director of the Food and Drug Administration Bureau of Wuyuan.

Outdated medical networks in rural areas, including a shortage of equipment and trained staff, is also a major problem. Wuyuan County has only 468 village doctors, many of them farmers who have never gone to professional medical college and have only been trained for several months.

Although more and more students have graduated from professional medical colleges, most of them preferred to stay and work in big cities and refused to work in village and township clinics.

Vice-Premier Wu Yi also pointed to local governments' poor implementation of the central government policy of establishing a rural medicare insurance system.

Wu, also the Health Minister, told a national meeting on rural cooperative health care last week that a number of pilot counties have not established a reasonable mechanism for collecting premiums from farmers.

Meanwhile, some local funds have not been used properly, she said.

The vice-premier stressed that another long-standing problem is the lack of government input in health.

In Jiangxi, financial investment in health from the provincial government only accounts for 2.3 per cent of its total expenditure.

The rate is almost the same on the national front.

Most government expenditure is used in urban areas and only a small part of it goes into the rural medical network.

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