This month the Chinese government has decided to combine the basic medical insurance for urban employees and the new rural cooperative medical scheme. The aim is to create an integrated system of basic medical insurance coverage for both urban and rural residents nation-wide. 

According to the Opinions on Integrating the Basic Medical Insurance Systems for Urban and Rural Residents (the "Opinions") issued by the State Council, the new medical insurance system will ensure a more standardised practice is employed for the management of services throughout China and aims to use medical resources efficiently in order to encourage the development of a sustainable and universal medical insurance system. In order to achieve these aims, the Opinions provide a number of initiatives which include provisions on the improved management of funds and selected agencies, a health insurance directory, security benefits and directions on unified coverage. The Opinions also provide guidance on the smooth running of the medical insurance system, with provisions on the integration of systems, policies and agencies. Pursuant to the Opinions, qualified regions are encouraged to improve health management systems and administration for health insurance. 

Under the new medical insurance system, all insured persons will enjoy the same payment standards and scope of subsidies. The fund that the new system will provide will be predominantly used to reimburse out-patient and hospitalisation expenses. This is likely to activate the medical market in rural areas which suffered in the past as a result of poor payment standards and limited insurance subsidy scope. The new unified medical insurance system could therefore be good news for pharmaceutical companies aiming to develop China’s large rural market. 

For further details, please see here (Chinese only).