Sat, Jan 01, 2011 - Page 2 News List

DOH unveils NHI premium formulas

HIGH NOON:The legislative speaker said a lack of consensus between the KMT and DPP over articles 28 and 29 of the draft package made a showdown inevitable

Staff Writer, with CNA

The Department of Health (DOH) has unveiled three formulas for calculating National Health Insurance (NHI) premiums based on a revised package proposed by the Chinese Nationalist Party (KMT) caucus, all of which allow for lower premium rates in the initial stage.

Department of Health Minister Yaung Chih-liang (楊志良) said all three versions were formulated on the basis of KMT caucus-initiated revisions to the existing National Health Insurance Act (全民健康保險法), which suggest differentiating premium rates based on the regular salaries of the insured and four additional types of income.

The first version proposes that the premium rate be set at 5 percent of regular salary for the first five years of implementation, with the government contributing at least 36 percent of coverage. The current premium rate is 5.17 percent.

This version also calls for an additional NT$20 billion in -“supplementary premiums” to be levied from four other types of income — interest income, stock dividends, professional income and any cash awards that are four times more than an individual’s monthly salary. The premium rate for the “supplement premiums” is tentatively set at 2 percent.

According to the ministry’s estimate, this version would allow the NHI system to remain solvent for five years, with a minimum of one month reserve.

Nevertheless, Yaung said, if the system is put into practice next year, the premium rate will need to be raised to 5.12 percent in 2017 and further adjusted annually to 6.11 percent in 2021.

As the existing NHI Act caps the premium rate at 6 percent, the law would have to be revised at that time, Yaung said.

Although the ministry has proposed two other premium collection formulas, the minister said, the first version is most preferable in terms of “professionalism.”

The second version does not require raising a monthly reserve fund and would allow the 5 percent premium rate to remain unchanged until 2017. However, the rate would be raised to 5.09 percent in 2018 and would reach 6.1 percent in 2021.

The third version proposes lowering the premium rate from the current 5.17 percent to 4.61 percent next year and then raising the rate to 4.72 percent in 2013, 4.84 percent in 2014, 4.96 percent in 2015, 5.15 percent in 2016 and 5.31 percent in 2017. Under this formula the rate would also hit 6.02 percent in 2021.

The differences in the three versions mainly lie in whether the NHI system should raise reserve funds as a hedge against financial instability, Yaung said.

Legislative Yuan Speaker Wang Jin-pyng (王金平) said on Thursday that the legislature would deal with issues surrounding the NHI Act on Jan. 4, based on KMT caucus--proposed revisions.

Given the lack of consensus between the KMT and the Democratic Progressive Party (DPP) on articles 28 and 29 of the draft package, a showdown vote could be inevitable, Wang said.

“Legislative caucus whips from both the KMT and the DPP will be allowed to air their views and positions in the Jan. 4 legislative session before a vote on the package is held,” he added.

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