Ensuring that the National Health Insurance system can continue   

to operate effectively, caring for disadvantaged groups, and implementing the reforms needed to create the “Second Generation National Health Insurance System”

This morning (March 17), the Minister for the Department of Health went to the Presidential Office to present a report to President Ma Ying-jeou on the proposals for reforming the finances of the National Health Insurance system. The President gave the following instructions:

1.The main reason for the increase in National Health Insurance expenditure over the past 10 years (1999 – 2008) has been the increase in the number of people aged 65 or over of nearly 500,000, leading to an additional NT$78.8 billion in healthcare expenditure. The number of people suffering from serious illnesses has roughly doubled, to reach 790,000, leading to a further increase in healthcare expenditure of NT$76 billion, while the introduction of new medicines and the adjustment of payment standards has brought about an additional increase of over NT$60 billion. The President emphasized the need to address the issue of increased National Health Insurance expenditure.

2.The President noted that, while the Bureau of National Health Insurance should focus on developing new sources of revenue, it should also continue its efforts to reduce unnecessary healthcare expenditure and cut waste. The President emphasized the need to achieve improvements in those issues that are of particular concern to the general public, such as the setting of reasonable prices for medicines, the reduction of unreasonable disparities in drug prices, strengthening the auditing of (and imposing severe punishments on) those hospitals that violate regulations, and educating members of the public who make frequent unnecessary visits to hospitals and clinics to adopt more appropriate behavior; he stressed the need to ensure that National Health Insurance system resources are used to maximum effect, in line with society’s expectations.

3.National Health Insurance data for 2008 shows that an average of approximately NT$37 billion per annum was being spent on kidney dialysis patients. This represents a major financial burden on the National Health Insurance system. In many cases, citizens suffer kidney damage because they believe the false claims made in advertisements for fake and inferior-quality “medicines” broadcast on illegal “pirate” radio stations. The President noted that this is an area where the government needs to coordinate the actions of the various relevant agencies to ensure more effective enforcement and protect the health of Taiwan’s citizens.

4.The President emphasized that, to ensure the stable, sustainable operation of the National Health Insurance system, the plan for the adjustment of National Health Insurance premium rates needs to be implemented as quickly as possible, so as to prevent the deficit in the National Health Insurance system’s finances from widening still further. The adjustment in National Health Insurance premium is calculated based on a 2-year financial balance, which means raising the premium rate from 4.55% to 5.17%. However, given that the economy has not yet made a full recovery, the government should allocate a budget appropriation to pay the difference for citizens with income below a certain specified level, so as to reduce the negative impact of the premium rate increase on society and on the economic environment. With respect to those National Health Insurance insured with a premium base of NT$40,100 or lower (i.e. those with a monthly income of less than around NT$51,410), the government will provide special assistance to cover the increase in their National Health Insurance premiums. This will mean that around 78% of Taiwan’s citizens will not be affected by the premium increase; the premium rate that they pay will effectively remain at 4.55% level. Those insured with a premium base of at least NT$42,000 (equivalent to monthly income of around NT$53,850) but less than NT$53,000 will have 20% of the premium increase paid for them, so the effective rate for this 9% (approx.) of the population will be 5.046%. Only those insured with a premium base of at least NT$53,000 (equivalent to a monthly income of approximately NT$67,950), representing around 13% of the population, will be required to pay the full premium increase themselves.

5.The President noted that the current adjustment plan is only a transitional measure, and that in the future the government will need to continue with the development of the “Second Generation National Health Insurance System,” and ensure that the transition to this new system proceeds smoothly. The Department of Health will be working actively to bring about the necessary revisions to the laws relating to the National Health Insurance financing system (i.e. to bring about the establishment of the “Second Generation National Health Insurance System”), and will be asking the legislature to give priority to considering the relevant revisions to the law. It is anticipated that the passage of a revised National Health Insurance law can be completed within two years, thereby helping to expand the funding base for the National Health Insurance system and making the sharing of the financial burden imposed by the system fairer and more equitable.