The state program has already lost tens of millions of plan members, and the trend is continuing.
The state health insurance system in China is bleeding plan members as tens of millions of them have left the coverage, citing higher costs as a primary reason.
The expense associated with the coverage is increasingly viewed as unaffordable for many people in China.
While the Chinese health insurance system was already too expensive for many people in China who continue to struggle within the economic downturn that has followed the pandemic, increasing costs have only made the situation worse.
Enrollment throughout the state-subsidized program in the country has plummeted. The system currently covers over 1.3 billion people throughout its many programs. That said, last year, it lost a massive 19 million people from its plans, a figure never before seen in the history of the program.
Enrollment has the potential to drop by an even larger number this year, according to analysts and officials. Of China’s eight provinces that have already reported their 2023 data for the first three quarters of the year, seven have already shown a drop from the same time in 2022.
There are many reasons being blamed for the spike in health insurance cancellations in China.
Healthcare analysts and Chinese government officials are pointing to rising premiums and co-payments, falling household incomes and restricted coverage as some of the top reasons that people are choosing not to continue their enrollment in the program. Those factors have driven the cost of coverage beyond the means of many people in China, especially migrant workers and farmers who aren’t within reach of urban and private benefit strategies.
The trend has some worrying about the rate of recovery for the second largest economy in the world during this ongoing economic downturn. China has not yet overcome challenges with consumers as it continues to grapple with slowdowns in its property sector that have continued for several years, on top of drooping exports.
“A lack of social safety net, led by strong health insurance coverage, has forced Chinese people to save a significant portion of their income to prepare for external shocks like serious diseases,” said Hang Seng Bank China chief economist Dan Wang. “That has undermined government efforts to boost consumption, which holds the key to China’s recovery from the post-Covid economic downturn.”
