Editor's note: Wang Chaoqun is an associate professor at the School of Public Administration of Central China Normal University. The article reflects the author's opinions and not necessarily those of CGTN.

Recent upgrades to the outpatient medical insurance can be considered major structural reform. The pooled fund of China's medical insurance covers outpatient medical services, providing reimbursement for insured employees seeking outpatient medical treatment or purchasing medication at designated pharmacies. A similar mechanism has been in place for many years in China's urban-rural resident basic medical insurance program.

Nonetheless, Western media outlets' have negatively depicted China's image, such as Reuters, Financial Times, etc. criticizing China's medical insurance system reform. Nevertheless, there are plenty of positive impacts from the reforms.

Some say that the reimbursement threshold for doctor visits is too high. Apparently, to receive reimbursements, there are some reasonable rules to follow.

Only expenses beyond the deductible can be reimbursed. The deductible in cities including Guangzhou and Nanjing is zero, while in Chengdu, Xi'an, Shenyang, and Wuhan, it's 150 yuan ($21.8), 200 yuan ($29.1), 240 yuan ($34.9), and 500 yuan ($72.8), respectively. Additionally, reimbursement ratio for the expenses beyond the deductible is at least 50 percent. The specific reimbursement ratio hinges on the medical institution. 

Meanwhile, a reimbursement cap is set. The caps in Xi'an, Chengdu, and Zhuhai are 2,500 ($363.9), while those in Jinan and Harbin are 3,000 ($436.6). In Wuhan, it's 4,000 ($582.2). In Guangzhou, the cap is approximately 10,000 ($1,455.5). In Xiamen and Nanjing, there is no cap set. The elderly receive preferential treatment, with lower deductibles, higher reimbursement ratios and caps. 

Also, the pooled fund can help the insured cope with risks from their personal accounts. The main beneficiaries of the reform are the elderly and people with high medical expenses, but young people can enjoy reimbursement if they get sick as well.  

According to data from the NHSA, in 2021, the per capita medical expenses of the elderly in medical institutions were around 8,000 ($1164.4), while active employees were only about 2,000 ($291.1). The per capita medical expenses of retirees were four times that of active employees. Accordingly, the elderly will receive higher medical insurance reimbursement than young people. 

But, how to cover elder care costs while ensuring continued prosperity and care for everyone else? Raising the reimbursement ratio for outpatient medical services represents can unleash the medical service demand of insured patients, particularly the elderly. By bolstering their access to healthcare, such a measure can improve the quality of life of seniors and curtail hospitalization rates among the insured, thereby preserving the long-term viability of the medical insurance fund.  

Prior to the reform, paying with personal accounts for outpatient medical services subjected the elderly to an out-of-pocket payment ratio of 100 percent. Their frugality often led to subdued demand for required outpatient medical services. After the reform, certain regions boast a reimbursement ratio of over 90 percent for outpatient medical services, sparking higher demand for outpatient medical services among the insured, especially the elderly. But this could bring pressure to the oversight of the medical insurance fund. Money going into the individual accounts get slashed and placed into the common pool.

The reform can augment primary healthcare by redirecting medical insurance funding towards the foundation of the healthcare system. Previously, roughly 30 percent of personal account funds were allocated to designated retail pharmacies, with the remaining portion disbursed to secondary and tertiary hospitals. Now, patients receiving care from primary healthcare institutions can enjoy substantially higher reimbursement ratios than if they go to higher-tiered medical institutions.  

Besides in several places, the deductible for medical services at primary healthcare institutions has been waived entirely. These measures, along with the multi-tiered diagnosis and treatment system implemented by the National Health Commission, can funnel more funds into the primary healthcare institutions, thereby raising the income levels of primary care physicians and boosting medical service capacity of community-level institutions. 

The reform enables reimbursement of outpatient medical services accessed out of town or out of province. China is home to a vast internal migrant population, with nearly 20 percent of them signing up to the government-led medical insurance program for urban employees. They move around a lot, particularly during the Spring Festival travel rush, and they require greater access to outpatient medical services out of town.  

China's highly developed high-speed rail network and its flourishing economy has made travel more convenient and popular, creating a large group of people who frequently engage in cross-regional tourism or business travel, and who may also require access to outpatient medical services in other localities. By the end of 2022, all regions with such a reform had instituted an interconnected settlement system for processing outpatient medical bills incurred out of town, facilitating the reimbursement process. 

Last but not least, the reform permits the use of personal account funds by employees' family members for medical treatments, medication purchases, or paying contributions to the urban and rural resident basic medical insurance program, which increase efficiency for medical insurance funds.  

By extending the availability of personal account funds to family members, the reform has mitigated the inefficiency previously associated with such funds, reducing the burden of medical care on employees' families. 

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