Press conference on corporate social insurance premium reduction to support epidemic prevention and control

A press conference was held Thursday afternoon to brief the media about issues on provisional reduction or exemption of employers' social insurance and medical insurance contributions and deferral of corporate payments to the housing provident fund.

China SCIO February 22, 2020

China News Service:

What are the specific policies and measures for reducing the basic medical insurance premiums of employees in stages? Will that bring more pressure on the smooth operation of the medical insurance fund?

Chen Jinfu:

The reduction of the medical insurance premiums in stages is an important decision. On one hand, it has provided support to the epidemic control, reform and economic development; on the other hand, it's a decision made after scientific research to meet the needs of medium and long-term economic balanced development.

As for specific arrangements, the National Healthcare Security Administration, the Ministry of Finance and the State Taxation Administration together discussed and issued a guideline. We recommend that local governments be responsible for the balance of local funds and may reduce the medical insurance premium paid by employers by half from February, for a maximum of five months, on the precondition that employees' medical insurance is paid and local medical insurance balance is maintained. If all regions implement the policy after careful deliberation, the burden of enterprises can be reduced by 150 billion yuan ($21.4 billion).

However, the policies need to be differentiated when being applied to different regions. For places where the medical insurance fund can pay for more than six months, the premium paid by employers can be reduced by half. For localities where the medical insurance fund can pay for less than six months, the premium payment can be postponed, which can also reduce the burden of enterprises' social security payment. However, local governments of localities where the medical insurance fund can last for less than six months may also choose to reduce the premium, provided that the balance of fund is ensured and the reimbursement of medical charges is guaranteed. The deferred payment policy that has been implemented in these localities can be continued, and the overdue fine will be exempted during this period.

In terms of the impact on the fund, in fact, we have made a scientific evaluation, which can be roughly divided into four aspects:

First, the impact of the epidemic on the medical insurance fund is limited. There may be a concern in the society that the fund will be affected by the medical insurance policies introduced during the epidemic to help guarantee medical insurance coverage and treatment. These measures include removing the restrictions onthe catalogue of illnesses and situations covered by the national basic medical insurance scheme,payment limit and drug purchase. On one hand, the expenditure on paying for both confirmed and suspected cases is really large, and the medical insurance fund and government public finance have played a joint role to serve the overall epidemic control and reduce the patients' worries of paying for medical treatment.

On the other hand, the expenditure is mainly concentrated in the areas where the epidemic is relatively serious. From what we know, the demand for normal medical services have shrunk this year due to the impact of the epidemic, and the medical expenses have declined accordingly. There are fewer people going to see a doctor in this period of time, so the fund's expenditure will slow down to a certain extent. Of course, when the epidemic ends, expenditure for normal medical services will slowly rebound, but this rebound may not lead to a great rebound in fund expenditure. In general, the impact of the epidemic on fund expenditure is limited. We can not only ensure the treatment of pneumonia patients, but also guarantee the expenditure of the medical insurance fund.

Second, at present, the national medical insurance fund is enough to maintain a long-term balance. The 2019 revenue of the fund was over 900 billion yuan, and the expenditure was more than 700 billion yuan, with a balance of more than 200 billion yuan. By the end of 2019, the cumulative balance of the fund stood at more than 1,300 billion yuan, which is enough to cover the expenditure for more than 22 months.

Geographically, 86 percent of the country has sufficient cumulative balance of the medical insurance fund to pay for more than six months. According to the aforementioned policy, over 80 percent of areas in China can cut the premium payment by half for up to five months. The remaining areas can postpone the insurance premium payment or take some special measures, which can also play a role in supporting enterprises. In a word, as the medical insurance fund is enough to stand the reduction and deferral and the policy varies according to different places' realities, it will not have a major impact on the fund.

Third, as you know, since the establishment of the National Healthcare Security Administration, a series of reforms have been put forward, including fighting against fraud, reforming the method of payment, and strengthening the fund budget management. Through prudent management, the efficiency of fund use can be improved. We have cooperated with the Ministry of Finance, State Taxation Administration, and National Health Commission to promote a stable operation of the medical insurance fund in the long term.

Last but not the least, reform brings dividends. We have launched the reform of the medical service cost and the reform of the centralized drug purchase system, and have taken key measures such as cracking down on insurance fraud and preventing excessive medical treatment, which have produced great dividends for the medical insurance fund. On one hand, it has improved the quality and efficiency of the medical services we pay for, and on the other hand, it has reduced the cost, and enhanced the utilization efficiency of the medical insurance fund.

With these measures in place, we are confident in the phased reduction of medical insurance premium paid by the employers. The policy was formulated to serve the overall situation and is effective for reducing the burden of enterprises. Meanwhile, the impact on the fund will not be great. Thank you.

Hu Kaihong:

I'd like to remind you that the State Council Information Office will hold a press conference in Wuhan at 4 p.m. today on the efforts of the Central Guidance Team to organize and guide epidemic control. Today's conference is hereby concluded. Thank you, speakers. Thank you all.

Translated and edited by Li Fangfang, Wen Qing, Li Xiaoyang, Ma Miaomiao, Li Nan, Ji Jing, Sudeshna Sarkar and Madhusudan Chaubey. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.


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