Pharmaceutical News
Raising National Health Insurance premiums, the only way to resolve the system’s strained finances?

A recent survey by the Hope Foundation for Cancer Care show that 60 percent of respondents are willing to pay an additional NT$100 in National Health Insurance (NHI) premiums, which is equivalent to a 5.5 percent increase in contributions, while 70 percent of respondents agree with the proposal to pay higher copayments for non-critical illnesses to allow the NHI to include more new drugs under reimbursement.


However, the best way to approach NHI premium increases to ensure lasting improvements to the system’s finances remains a question. The Taiwan Society of Health Economics, the Taiwan Economic Association and National Yang-Ming University’s epidemic prevention center on Oct. 9 held a forum where National Health Insurance Administration (NHIA) officials, public health experts, frontline health workers and economists voiced their opinions on addressing the NHI’s strained finances.


Proposal I: NHI funding must be borne by the government, employers and employees

“The NHI must balance its income and expenditures,” NHIA Deputy Director General Tsai Shu-ling said, noting that of the NT$700 billion in NHI income, 36 percent are drawn from the government, with employers contributing 30 percent and the public contributing 34 percent. “While the three stakeholder groups have been sharing the burden, an aging population, declining birthrates have compromised NHI finances.


“If the NHI premium is left unchanged, we will be facing a shortfall of nearly NT$90 billion next year,” Deputy Director General Tsai said, adding that Taiwan’s laws stipulate that there are two ways of balancing NHI finances, one being raising NHI premiums and the other being reassessing the scope of the reimbursements. With the latter option unlikely to be feasible, without raising NHI premiums, the system’s safety reserves could be exhausted by the end of 2021.


“Raising the NHI premium is the best option,” according to Han Hsin-wen, an assistant professor of accounting at Tamkang University. Han said that given the rapidly aging population, even if the NHI premium is raised this year, another increase would likely be required in two or three years’ time to ensure the system’s long-term viability. The rate of increase will be expected to be steeper.


Proposal II: increasing copayment to uphold the user pays principle
“Unfortunately, most people justify their own use of NHI resources and regard usage by others as wasteful,” NHIA Medical Administration Section Director Lee Chun-fu said. Often, the knee-jerk reaction to raising NHI premiums is to appeal against wastage of resources, which has been an obstacle to consensus on implementing measures such as raising higher revenues from copayments.


Increasing copayments is among the strategies at combating wastage of resources, by encouraging the public to lower the number of nonessential medical consultations and to abide by the referral system.


Section Director Lee said that proposed measures centering on increasing copayments include setting a different fee schedule for patients who have been referred and those that did not; waiving the copayment exemption on refillable prescriptions for patients with chronic illnesses and charging copayments on diagnostic exams; reassessing the copayment exemption for patients with catastrophic illness, such as those who require new cancer drugs. As an example, rather than having the NHI pick up the entire tab, patients who require new cancer drugs must contribute capped copayments.


While past discussion have attributed wastage of medical resources to certain people who visit medical centers for minor illnesses, lapses in adhering to the referral system, Shinkong Wu Ho-su Memorial Hospital Vice Superintendent Hung Tzu-jen noted that studies show that a majority 90 percent of patients with minor illnesses do visit clinics before they visit hospitals. The exception is patients with chronic illnesses, which are harder to categorize, Vice Superintendent Hung said. “When the patients are in stable condition, they are able to make do with visits to clinics, but that changes when they turn for the worse and require hospital visits.”


Vice Superintendent Hung suggested that the NHI should be reformed under the principal of usage-based contribution and that expanded reimbursements should be provided to those with more serious illnesses. At the same time, patients without critical illnesses who wish to undergo high priced examinations such as CT, MRI and PET scans, should be charge a fee equivalent to 10 percent of the cost or a fixed copayment amount. The drug


“Adjustments to the copayment scheme must make a tangible difference to the public,” Vice Superintendent Hung said, noting that it is crucial to instill the concepts of user-pays and that NHI resources are meant for serious, rather than minor illnesses to help the people make better decisions about their usage of drugs and examinations and to tackle the NHI’s financial challenges together.


Proposal III: basing NHI premiums on household income to improve fairness

Former Department of Health Minister Yeh Ching-chuan have said that he feels guilty about drawing a monthly pension of around NT$80,000 and paying only the minimum NHI premiums, which he thought was unreasonable. Similarly, Dr. Su Yi-fong, a respiratory specialist at the Taipei City Hospital said that as the NHI is a form of social welfare, the system must have a fairer fee structure.


Dr. Su supports the proposal to base NHI premiums on household income, which takes into account the non-wage income from interests, dividends, secondary jobs, real estate sales, as opposed to looking at just salaries.

However, in previous NHI reforms, the proposal to base NHI premiums on household income drew concerns about undue penalization of the unemployed, homemakers and unmarried people and was ultimately replaced by supplemental premiums.