Accepting a medal from President Ma Ying-jeou (馬英九) on Tuesday, former National Security Council (NSC) secretary-general Su Chi (蘇起) blamed the nation’s current troubles on the former Democratic Progressive Party (DPP) regime. But how can the DPP be blamed for the mess that the National Health Insurance (NHI) system finds itself in? For that, the Chinese Nationalist Party (KMT) has no one to blame but itself.
The NHI system’s finances have been problematic right from the start. That is why, not long after it was launched, people started thinking about how to reform the system. Set up under a KMT administration, deliberations on system reform continued when the DPP took over the reins of government. After years of research and discussion, medical, patient and government representatives finally proposed draft amendments to the National Health Insurance Act (全民健康保險法). However, the KMT-dominated legislature chose to boycott these measures, preventing the proposed amendments from being enacted. If these amendments had been passed into law before Ma took over the presidency in 2008, his administration would not now be facing the risk of the NHI going bankrupt.
In view of the difficulty of adjusting contribution rates for health insurance, the legislature, when drafting the National Health Insurance Act, had the foresight to assign the power to set premium rates to the executive department. However, each time talk emerges of the Cabinet considering adjusting premiums, it is sure to whip up a political storm. The NHI was already in a poor financial condition before administrative power passed from the KMT to the DPP in 2000, but the KMT, worried about its prospects in the presidential election, was not willing to adjust premium rates upward. Consequently, when the DPP took office, it faced a crisis in which there was no option but to increase premiums.
By 2002, local governments’ NHI subsidies were more than NT$30 billion (US$945 million) in arrears and the Bureau of National Health Insurance had run up NT$50 billion in bank loans. For the sake of raising NHI premiums, the DPP government attempted to lessen the political backlash by sacrificing then Department of Health (DOH) minister Lee Ming-liang (李明亮). Today the NHI system is in an even worse financial predicament, with local NHI subsidies NT$60 billion in arrears and outstanding bank loans of NT$90 billion. Now it’s the turn of another health minister, Yaung Chih-liang (楊志良), to be sacrificed, but without having raised NHI premiums at all. Comparing the two cases, the DPP, whom the KMT frequently accuses of incompetence when it was in power, has shown that it was willing and able to resolve the NHI’s problems.
Article 20 of the National Health Insurance Act stipulates that the NHI premium rate must be assessed by an actuary group at least every two years, and that the rate should be adjusted if any of the following occur after the actuarial review: 1. The actuarial mean value of the premium rates for the next five years falls beyond the range of plus or minus 5 percent of the premium rate of the current year; 2. The reserve fund of this insurance drops to its minimum required level; 3. Any addition to or reduction in benefit items, contents or payment schedules that affects the finance of the insurance system.
Yaung was, therefore, obeying the law when he applied for Cabinet approval to adjust the premium rate. However, the Cabinet, putting populism first, avoided making a decision for a long time. Finally it decided to choose an option that would affect the fewest people, but which does nothing to ease the NHI’s financial woes. In such a situation, of course Yaung chose to resign.
Yaung announced that NHI premium rates would be raised as soon as he took up the post of health minister, so he clearly understood how bad the NHI’s finances were. Disregarding how his words might affect the KMT’s standing in the legislative by-elections, Yaung repeated time and again that NHI premiums would have to be raised. Although pan-blue legislators accused him of having “poor judgment,” he still had the highest approval rating of all Cabinet ministers. Evidently, adherence to professional ethics can win popular support, even if it provokes resentment.
Yaung’s resignation highlights the unwillingness of the Ma administration and the Cabinet headed by Premier Wu Den-yih (吳敦義) to do what is needed. They have ideas about how the country should be governed, but they neither stick to their principles nor have the fortitude to carry out these policies. Who has faith in the KMT’s determination to push through the necessary amendments to revamp the NHI system? Yaung Chih-liang has no faith in the party, and neither do I.
Jan Shou-jung is an independent commentator.
TRANSLATED BY JULIAN CLEGG
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