MICROCAPITAL BRIEF: China Requires Provinces to Purchase Medical Insurance for Farmers Through Private Providers

The Chinese government reportedly is requiring provincial governments to purchase commercial health insurance for farmers through the New Rural Cooperative Medical Scheme (NRCMS), a social security program run independently by each province and funded by the central government, local governments, farmers’ cooperatives and families. According to Zhu Hongming, head of the Office of Cooperative Medical Services at the Ministry of Health, “Funds to buy commercial insurance will come from the provincial rural health insurance scheme [NRCMS], so members of the programme will not have to pay extra premiums for it.” The insurance will be purchased by NRCMS at a cost of approximately CNY 15 (USD 2.38) per person annually. Through this scheme, a farmer will be reimbursed a minimum of 50 percent of his or her healthcare costs by the insurers if out-of-pocket costs exceed his or her net annual income.

According to the Global Extension of Social Services, a platform run by the UN’s International Labour Organization, NRCMS reached 97 percent of rural residents and families in China as of 2010 at which point participation in the scheme was voluntary. This reported development will make participation in the scheme mandatory, with provincial governments responsible for extending the service.

By Lena Phillips, Research Associate

About The New Rural Cooperative Medical Scheme (NRCMS)
Established in 2003, NRCMS is a state-subsidized social security program aimed at farmers and rural residents in China. According to the Global Extension of Social Services, a platform run by the UN’s International Labour Organization’s Social Security Department, NRCMS reached 97 percent of rural residents and families in China as of 2010.

About The International Labour Organization (ILO)
Founded in 1919, the International Labour Organization (ILO) is an agency of the United Nations that promotes peace and improved living standards. The objective of ILO is to advance opportunities for men and women to obtain productive work in conditions of freedom, equity, security and human dignity. Headquartered in Switzerland, its founding mission is that labour peace is critical to prosperity. For the biennium 2012-2013, ILO anticipates a budget of USD 861 million.

Sources and Additional Resources:

AsiaInsuranceReview.com Article, “China: Gov’t urges provinces to buy health covers for farmers,” http://www.asiainsurancereview.com/News/View-NewsLetter-Article/id/27067/Type/eDaily

MicroCapital.org Article, 9 April 2012: “MICROCAPITAL BRIEF: Chinese Government Establishes 12 Goals to Improve Local Capital Markets, Access to Finance for Private Small and Medium-Sized Enterprises,” https://www.microcapital.org/microcapital-brief-chinese-government-establishes-12-goals-to-improve-local-capital-markets-access-to-finance-for-private-small-and-medium-sized-enterprises/#more-18257

MicroCapital.org Article, 23 March 2009: “MICROCAPITAL STORY: PlaNet Finance teams with Pfizer to research Healthcare Needs of Low-Income Chinese in pursuit of Effective Microinsurance and Microfinance Plus Services,” https://www.microcapital.org/microcapital-story-planet-finance-teams-with-pfizer-to-research-healthcare-needs-of-low-income-chinese-in-pursuit-of-effective-microinsurance-and-microfinance-plus-services/

MicroCapital Universe Profile: The New Rural Cooperative Medical Scheme (NRCMS), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=New+Rural+Cooperative+Medical+Scheme+%28NRCMS%29

MicroCapital Universe Profile: International Labour Organization (ILO), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Labour+Organization+%28ILO%29

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