The National Health Insurance Committee (NHIC) is slated to discuss adjustments to the National Health Insurance (NHI) premium rates on Nov. 20. With the current NHI premium rate standing at 4.69 percent, the figure would need to be increased to above 5.5 percent for the system to end in the black in 2021. The Ministry of Health and Welfare’s (MOHW) current proposal is calling for an increase to roughly between 5.25 percent to 5.55 percent. However, considering the economic impacts of the pandemic, sources close to the matter have said that the government is aiming to cap the premium rate at 5.17 percent, the level set during the former Ma Ying-jeou Administration. Sources also claimed that the former Ma Ying-jeou Administration had opted to cut NHI premium rate out of considerations to secure a second term.
The NHI began operating in 1995 with premiums set at 4.25 percent. Between the NHI’s inception and 2012, premiums were raised twice, first to 4.55 percent, followed by a second increase to 5.17 percent. In 2013, the second generation NHI was introduced with expanded income sources from supplementary premiums. As a result, the premium rate was decreased to 4.91 percent and paired with suppletory premiums of 2 percent. While the supplementary premiums have boosted NHI by around NT$40 billion each year, the NHI’s safety reserve had swelled steadily. At the time, with ample safety reserve and pressures of securing the reelection, the premium rate was lowered to 4.69 percent and the supplemental premium rate lowered to 1.91 percent, which has since remained unchanged.
In 2017 the NHI’s finances began to dip into the red and recorded an annual shortfall of NT$9.84 billion. In subsequent years the NHI’s shortfall continued to expand and is projected to reach NT$6.76 billion. Also, as of September this year, the NHI safety reserve is set to dip below 2.42 months’ spending. The National Health Insurance Act stipulates that the NHI safety reserve must maintain a level equivalent to one to three months of expenditures based on actuarial calculation. The latest estimates show that by the end of next year, the safety reserve will dip below the legally required threshold equivalent to one month’s spending, which will trigger premium rate adjustment discussions.
NHIC member Wu Rong-da, who also serves as Vice Chairman of the Consumers’ Foundation, said that the pandemic has affected the economy and the society immensely and dealt a heavy blow to Taiwan’s traditional industries and the tourism sector. If the NHI rate is increased significantly, not only will the burden on the people increase, but also greater pressure will be placed on employers who must shoulder 60 percent of NHI’s premiums of their employees.
Vice Chairman Wu pointed out that some NHIC members are getting ready to propose an increase that will replenish NHI reserves to the legally required level equivalent to one month’s expenditures. Given this objective, there is a chance that the rate will not be increased to exceed little more than 5 percent. Another NHIC member, who wished to remain anonymous, said that the committee is planning to raise the premium just high enough for the safety reserve to reach the legally required threshold by the end of 2021, noting that further increases will have to consider Taiwan’s macroeconomic conditions. The NHIC member said that the MOHW’s proposal is calling for a steep increase in NHI premiums and that a tremendous pressure has been placed on the NHIC. “The MOHW is speaking as if the NHIC holds great power on the matter, if that is the case, then we will be great for once and raise the NHI premium at our accord prioritizing the needs of the people instead of the ministry’s agenda,” the NHIC member said. However, other NHIC members and even some employers’ representatives have voiced support for steeper premium increases.
[2020-11-16/Liberty Times Net]
