Evaluating Sustainability of Medical Insurance Scheme for Urban Employed Individuals in China*

In the late 1990s, the Chinese government established the medical insurance scheme for urban employees and retirees. Given China's considerable size and diversity, the reform of the medical care system faces many challenges. It is important to analyse and evaluate the impact of the reform on individuals’ health care benefits and on their financial burden due to medical expenses. This research investigates the sustainability of the urban medical insurance system. With co-operation from the Bureau of Labour and Social Security of Kunming of China, this article creates a static micro-simulation model for predicting and evaluating the medical insurance policies. The model investigates the balances of the social pool fund and personal savings accounts. In the model, administrative data over 2001–2005 were used as the micro-simulation base data sets. With 2006 as the commencement year, the model forecasts medical service expenses and medical insurance policy settings for five years until 2010. This research aims to advance the understanding and impact of health insurance reform in China, and to assist in future policy formulation and implementation.