The Legislative Yuan postponed deliberations that had been scheduled for yesterday about a proposed amendment that would eliminate health insurance premiums for lower-income people older than 65, opting for further discussions.
The Chinese Nationalist Party (KMT) caucus has proposed an amendment to the Senior Citizens Welfare Act (老人福利法) that would exempt those older than 65 and whose income tax bracket is under the 20 percent threshold from paying National Health Insurance (NHI) premiums.
Last week, five medical organizations published a joint statement saying that the amendments would exacerbate generational inequality and increase financial strain on the NHI system.
Photo: CNA
Under the KMT caucus’ original proposal, elderly people who have individual income tax rates under 20 percent would be exempt from paying NHI premiums.
The party later scaled back the proposal to only exempt those with a 5 percent income tax rate.
In Taiwan, people who make up to NT$590,000 (US$17,998) per year pay a 5 percent income tax rate, while the 20 percent tax rate is applied to people with an annual income above NT$1.3 million.
There is still a need for further discussion on the proposed amendment, KMT caucus secretary-general Lin Szu-ming (林思銘) said yesterday, adding that the caucus has asked Legislative Speaker Han Kuo-yu (韓國瑜) to continue negotiations.
Across the nation, the thresholds are not consistent for determining who is exempt from paying health insurance premiums, with 15 administrative regions implementing various limits, Lin said.
The KMT believes that this inconsistency should be further discussed before passing the bill, he added.
The Ministry of Health and Welfare on Monday said that the KMT caucus’ plans could bleed the NHI program of its key reserves by 2026.
A premium exemption for elderly people with income tax rates under 20 percent would cut NT$54 billion in revenue from the NHI system per year, the ministry said.
An exemption for those with a 5 percent income tax rate would cause NHI revenues to drop by NT$24.1 billion, it added.
Both proposals would leave the NHI safety reserve with less than one month worth of expenditures by 2026, putting the system in peril, it said.
“Tax-exempt elderly people are not necessarily poor,” Deputy Minister of Health and Welfare Lin Ching-yi (林靜儀) said, adding that for elderly people drawing monthly pensions, the first NT$814,000 is not counted as income for tax purposes, while another NT$92,000 is tax exempt.
“This group of elderly people have an annual income that far exceeds that of many young families or single people,” and could lead to conflicts stemming from a feeling of “generational exploitation,” she said.
The shortfall caused by the less costly proposal represents just 3 percent of the NT$875.53 billion in total NHI expenditures budgeted for last year, she said.
However, given the annual deficits run by the system, any loss of revenue could further hurt the system and force another premium increase, she said.
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