The Bureau of National Health Insurance plans to raise the premium rate from the current 4.25 percent to 4.91 percent due to mounting expenditures and heavy deficits, Chang Hong-jen (張鴻仁), CEO and president of the bureau, said yesterday.
Chang said that the national health insurance premium rate has been kept at 4.25 percent since its inception in 1995. But the demographics of the nation have changed, he said, as the proportion of elderly has increased. Add to this rising medical costs with the application of hi-tech equipment, the bureau felt that the time had come to adjust its rate, Chang said. The bureau has been in debt since 1998.
Statistics released by the bureau show that as of the end of 2000, the number of insured individuals exceeded 21.4 million, with a coverage rate of 96 percent. Nearly 91 percent of the more than 17,000 medical institutions are participating members of the national health insurance scheme.
Over the past seven years, the bureau's revenues from premium payments grew by an average 4.26 percent annually, while the expenditures increased by a yearly average of 6.26 percent.
According to Chang, the accumulated deficit of the past few years has exhausted the bureau's reserve fund and the amount of the reserve has dropped below the minimum required level.
Chang added that the bureau may have difficulties paying all the participating institutions by March or April due to a serious shortfall in revolving funds.
In view of the imminent financial difficulties, the bureau is seeking to borrow from financial institutions. It is estimated that the bureau will need at least NT$28 billion in loans to balance its finances this year.
Chang said the bureau has no choice but to raise premiums and increase revenues.
Under the National Health Insurance Act, the total amount of the reserve fund must be equal to the total amount of benefit payments over the most recent one to three months based on actuarial principles. The ratio of premiums or reserves must be adjusted when the total amount of the reserve exceeds three months of payments or falls below one month.
Chang said that the bureau has submitted a draft for the adjustment of the ratio of premiums to the Department of Health under the Cabinet. The new ratio will become effective with the approvals of the health department and the executive branch.
A major reason for the financial difficulties at the bureau is that over recent years, all local governments have seen fit to delay their subsidiary payments to the bureau.
Of the NT$33.35 billion owed by local governments, the Kaohsiung City Government is NT$9.3 billion in debt and the delayed payments by the Taipei City Government have accumulated to NT$9.1 billion.
With the implementation of the new ratio, the monthly premium payment of a group insurance applicant will be 15.5 percent higher than the current payment.
With the new ratio, the monthly premium payment of a family of four will be about NT$250 higher than the current level.
Chang said that despite the fact that the program had been constantly operating in the red, a recent survey has shown that public satisfaction was high at 71 percent.
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