Objections must be raised to the legislature’s review of the Cabinet’s second-generation national health insurance (NHI) draft during next month’s extraordinary session. What purpose will this review serve beyond solving the Bureau of National Health Insurance’s (BNHI) immediate financial difficulties? What is worse, the amendment is likely to undermine the whole point of the system, which is to provide for national health and safety.
Bureau president Chu Tzer-ming (朱澤民) said last month that its expenditure is growing at a faster rate than people’s incomes, which are in turn rising faster than salaries. To reduce the gap between the growth in expenditure and salaries, it has been proposed that the premium be calculated based on total income, instead of salary alone. However, since there will still be a gap, Chu warned that the public should be prepared for possible premium hikes, albeit not in the immediate future. Clearly, this is just a temporary fix.
There are at least two reasons why the above reform is destined to fail. First, the strategic financial approach taken makes it inherently self-restricting. Second, there has been no sincere commitment to necessary social and economic structural reforms.
The main goals of the second-generation NHI reforms include fairness, administrative simplicity and balanced finances. Any assertion, however, that the new premiums are fairer because they are based on the insured party’s total income, incorporating both salary and non-salary income, is wishful thinking. Even the people proposing this amendment admit that high-income earners derive the majority of their wealth from sources other than their salaries. However, stock market, real estate deals and overseas investments are currently tax exempt. The Department of Health has said this is a tax reform issue, not a health insurance issue.
Non-salary income refers to any money gained by low salary earners above and beyond their regular salary, including non-regular earnings such as overtime pay, year-end and holiday bonuses, as well as employee performance and full attendance bonuses. It does not refer to non-wage capital gains from sources such as stocks, bonds, mutual funds and real estate.
Under Taiwan’s unfair tax system, regular salaried workers often come off worse. Whereas salaries are automatically recorded for tax purposes, it is easier for people with a non-salaried income not to claim their earnings. There are now a large number of people with annual incomes of more than NT$5 million (US$156,000) who do not pay tax, just as national tax revenues are falling.
Unfortunately, changes to the BNHI’s expenditure and the gap between salaries and income are simply the result of modern development. An aging population and more expensive technologies push up the BNHI’s expenditure, while finance capitalism fosters growing socioeconomic inequalities.
Today, the gap between non-salary income, especially capital gains, and money earned from labor is growing. Employment uncertainty serves as a disincentive for salary earners to have more children, just as high-income earners demand health care involving high-tech equipment and expensive treatments, leading to rocketing BHNI expenditure.
Finally, stagnating or even negative salary growth in recent years is the result of the break-up of the traditional career path from school to employment — established in the post-war period. There is no longer any guarantee that conventional choices offer a way out of poverty. As a consequence, people are disillusioned and disorientated, having lost confidence in the social system.
In March, the US Congress finally passed the healthcare reform bill proposed by US President Barack Obama, but only by a slim margin. One of the reasons it passed is because healthcare should be a social policy that protects against unforeseen events in one’s life. It is no longer an issue merely for the poor and disadvantaged.
The second-generation NHI reform ignores the uncertainties surrounding income and employment that are part of modern life. In the face of dire national finances resulting from falling salary-derived tax revenue and a shrinking labor force, the government has chosen to tweak the way insurance premiums are calculated.
If we want the NHI system to survive, we may have to accept that individuals are going to have to pay more for the privilege. We may also have to look into taking out private health insurance policies. We cannot let the system fail because of a reluctance to take responsibility for it. The consequences would a return to poverty and poor standards of health.
Carl Chang is a professor in the Department of Social Welfare at National Chung Cheng University.
TRANSLATED BY EDDY CHANG
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.
Since the Russian invasion of Ukraine in February 2022, people have been asking if Taiwan is the next Ukraine. At a G7 meeting of national leaders in January, Japanese Prime Minister Fumio Kishida warned that Taiwan “could be the next Ukraine” if Chinese aggression is not checked. NATO Secretary-General Jens Stoltenberg has said that if Russia is not defeated, then “today, it’s Ukraine, tomorrow it can be Taiwan.” China does not like this rhetoric. Its diplomats ask people to stop saying “Ukraine today, Taiwan tomorrow.” However, the rhetoric and stated ambition of Chinese President Xi Jinping (習近平) on Taiwan shows strong parallels with