Health Insurance for Catastrophic Illness Announced in China

The Chinese government’s call for commercial health insurers to offer supplemental insurance to cover catastrophic illness, announced in late July 2015, is set to change the landscape in the medical device and pharmaceuticals market.

The Chinese government implemented nationwide health insurance, covering both urban and rural areas, in 2011, but coverage remains minimal. Many residents continue to pay high out-of-pocket costs for healthcare, particularly for serious illness, and particularly when Western products are used in treatment.

To alleviate burdens on patients, the central government has enlisted private insurance companies to offer supplementary insurance programs to both rural residents and jobless urban residents experiencing major medical illness.

The supplementary insurance will reimburse at least 50 percent of medical costs that are not covered by traditional insurance schemes and the injured party’s copay (the latter is based on average disposable incomes in each province).

It is still unclear what illnesses will be considered as “catastrophic illnesses.”