Recently, the provincial government of Guangdong, Shandong, and other parts of China issued a notice to increase the minimum payment term of workers’ health insurance to 30 years for men and 25 years for women. The move sparked heated debate. Why did the authorities raise the minimum payment term? What impact will it have on people?
Xinhuanet reported on July 12 that the Guangdong Provincial Health Security Administration, the Guangdong Provincial Department of Finance, and the General Department of Taxation of Guangdong Province issued “Temporary measures to convert and resume basic health insurance of Guangdong province.” The cumulative payment term will be 30 years for men and 25 years for women.
Previously, at the end of 2021, the Shandong Provincial Health Security Administration, the Shandong Provincial Department of Finance, and the Shandong Provincial Tax Department also announced that the province would agree on the minimum payment term of health insurance for employees, which is 30 years for men and 25 years for women.
According to the government’s interpretation, the minimum term is an essential requirement that is set to ensure that employers and employees fulfill their insurance obligations. All insured employees who have reached the minimum payment term will no longer pay health insurance after retirement and will enjoy health insurance benefits.
This also means that if the public’s premium cannot reach the required number of years, health insurance benefits after retirement will be affected.
Davy Jun Huang, an economist living in the United States, told NTDTV that in recent years, Chinese health insurance premiums are increasing year by year, and now they have to extend the time to pay, which will increase the economic burden of low and middle-income families.
Davy Jun Huang gave an example: a family can pay more than $15 (100 yuan) for health insurance per person; now, the insurance premium has increased to $30, then $45. A family costs an average of more than $300 in health insurance premiums each year, and they have to take care of the elderly, which is quite a heavy burden for them. This amount can represent about 20% of the disposable income of low-income people.
Xie Tian, a professor at the Aiken School of Business at the University of South Carolina, said: “We’ve also heard about issues of embezzlement, whether it’s health insurance, life insurance or pension, so we also cannot rule out that the authorities have appropriated some funds, making the current fund insufficient. If it is insufficient, (they) increase the fee or extend the payment term of health insurance.”
The question is: After all, what is the cause of the sudden increase in the minimum payment term of health insurance in many provinces?
Mr. Xie Tian said: “I think the cause of this is the lack of money. If they don’t have enough money, the insurance premium they receive will not be enough to cover the current health insurance costs and compensation demands. So there’s no other way.”
The newly issued health insurance policy has also attracted the attention of a large number of people.
Mr. Gao, a resident of Wuhan, thinks that the government health insurance fund is not enough, so it needs to increase the payment term to redeem it. He told RFA on May 14 that:
“Previously, health insurance payment was limited to 15 years and you could get health insurance for life. Both men and women paid for 15 years. Now after the regulations are modified, the burden on people will be heavier, whether they can afford to pay or not. This greatly affects the people.”
Gao believes that (it has been) three years after the outbreak of the COVID-19 epidemic, the government’s PCR or nucleic acid testing costs exceeded $44 billion, which came from the health insurance fund. He said: “The health insurance fund is unlikely to have much left, otherwise it will not suddenly increase the payment term like that, there is definitely a problem with funding.”
Applying the new health insurance policy also means that business employees who have paid health insurance for the previous 15 years will still have to pay. In this regard, Zhang Yang, a sociology scholar in Guangdong, told RFA that the problem of increasing the premium period is very serious, as not many people can afford 30 years of insurance. He gave an example:
“Many people can’t work at the age of 25 now. If you’re a PhD student or a doctor, you’re over 30. The government requires payment for 30 years, which is almost impossible. Or if you are unemployed midway, you cannot pay health insurance, because you can only pay social insurance and health insurance if you have a job. If you do not have a job, you cannot pay insurance.”