Experts call for health premium hikes

Once the cornerstone of social development, Taiwan's National Health Insurance (NHI) will teeter on the brink of demise if public resistance to premium hikes continues, foreign health experts observed at an international symposium to celebrate the NHI's 10th anniversary in Taipei yesterday.

Although the rest of the world envies Taiwan for its success in providing easy, affordable and universal healthcare, Taiwan's NHI is suffering from a recurrent financial crisis that also besets other nations like the UK, US, Germany and South Korea. As in these countries, health insurance is a highly politicized issue in Taiwan.

"Taiwan NHI's financial problems stem from two factors: people's mindset and politicians' intervention," said William Hsiao (蕭慶倫), a professor of economics at Harvard University who helped design the NHI a decade ago.

In Hsiao's opinion, the government failed to incorporate public participation at the launch of the NHI a decade ago. Deprived of adequate information, Hsiao said, people soon developed "free-lunch syndrome" and go doctor-shopping. "Taiwanese people think that they don't need to pay more since they've got NHI. In fact, the rise of insurance rates is an inevitable trend as the society grows older, richer and demands more medical care," Hsiao said.

As Taiwan matures from a one-party state to a vibrant democracy, the insurance rate has increasingly become a bargaining chip in party politics, according to Hsiao. When the financing of the NHI was legislated under an authoritarian system, the executive branch was empowered to raise the premium rate whenever the program faces a deficit. But when faced with the opposition-dominated Legislative Yuan that now exists, the executive branch has lost its power and political conflicts flare up.

"The solution is to revise the law to allow insurance rates to edge up automatically," Hsiao said.

Although politicians usually follow the "no premium raise" mantra to pander to potential voters, experts from other countries suggested that a fare hike, if well managed, would not trigger strong opposition from consumers.

"When [British Prime Minister Tony] Blair won the election in 1997, one of his [campaign platform] planks was not to increase taxation," said Chris Ham, professor of health policy and management at the University of Birmingham. "But in 2002, when the Blair government raised the general tax about 1 percent to subsidize health spending, an opinion poll conducted three or four months after the raise actually showed that people are willing to pay more for their own health," Ham said.

Uwe Reinhardt, a professor of political economy at Princeton University, agreed that a premium increase would be a good way to sustain the universal insurance plan.

"Taiwanese could pay twice the fee now without hurting its macroeconomics," Reinhardt said.

Official showed that Taiwanese people pay 15.4 visits to physicians per year and that the country spends about 6 percent of GDP on healthcare -- a relatively low figure compared to the US' 15.04 percent.

Reinhardt that the real issue is to share the insurance burden and foster a spirit of fraternity.

"While 80 percent of health spending is used on 20 percent of the population who are severely or chronically ill, it is only natural that not every one feels their money is fully spent on their own health," he noted.

On the sideline of the NHI's financial difficulties, Reinhardt advised Taiwan to steer away from the US example where many families go bankrupt because of health costs.

"Privatization of health insurance won't solve the financial deficit. It just sweeps the problem under the rug," he said. "The competition between insurance companies only makes programs less affordable, [and] over 46 million Americans are not covered."