Medical insurance in China? Insured but not for sure…

Last year, the movie “Dying to survive” turned out to be the box office smash hit and led to a huge discussion about the medical insurance system in China. It was a story about how a Chinese leukemia patient smuggled cheaper cancer treatment medicine from India.

Unlike the statutory health insurance in Germany, which covers almost everything, things are different in China. Even people who have an insurance need to pay a lot of money for the treatment when they have a serious disease, e.g. a cancer treatment costs 300,000 Yuan (40,000 Euro), one needs to pay up to 50% out of his own pocket.

Moreover, imported medicine and new treatments are not included in the insurance, patients need to pay this on their own. The average income in Shanghai is about 8,000 Yuan (1,000 Euro), thus, we say in China “If one person gets sick, the whole family goes bankrupt.”

In the last few years, commercial insurance services have been booming. Various companies start to engage in that area e.g. Alibaba has launched a mutual insurance product named “Xianghubao (相互保)” where a group of policyholders (in Alibaba’s case, normal people) comes together to share risks and expense of insurance policies. In case when one falls ill, the sick person can receive the entire lump sum payment, while the cost is borne by other group members collectively.

But the market right now is still a bit chaotic: fraud and hiding information happens all the time. The Chinese consumers have a rather low trust on the providers, they expect better regulation and clear, transparent information in this field.

Author: Yue Liu, Spiegel Institut Mannheim