The Inconvenient Truth About Taiwan's National Health Insurance
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Loading... - Boram Choi
- 18 Oct 2022
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The year was 2007. Then-Deputy Minister of Health Chen Shih-chung – yes, the same man who 15 years later would shepherd Taiwan through the COVID crisis with minimal harm – announced gravely: “The National Health Insurance (NHI) system is on life support.”
“We have a terrific NHI, ranked second in the world by The Economist,” said a visibly frustrated Chen. “It serves 99% of the population, it covers an extremely wide range of medical treatments, it has extremely low administrative costs – but we have to be willing to pay to keep it going.”
Chen was speaking at the Bureau of National Health Insurance’s year-end news conference. As a health reporter for the Taipei Times (my first job in the media), I dutifully wrote my copy: “The NHI totters on the brink of insolvency.”
That sentence, and various paraphrases of it, had been written by numerous reporters in all types of outlets long before I wrote it for the Taipei Times. And although my career took me away from health reporting, I couldn’t help but notice how many variations of the same story kept appearing. For example, Taiwan Business TOPICS in 2019 published a cover story titled “The Looming Challenge for National Healthcare Insurance.”
The story’s lead reads: “For the time being, Taiwan’s highly popular universal healthcare program is still solvent. But due to rising costs and a rapidly aging population, the system may run out of funds within two years unless increased premiums and other reforms are put in place.” While some of the details had changed, it was in essence an article that could have been written in 2007.
How is it possible for such a popular system – the NHI garnered an approval rate of 91.6% in 2021, according to the National Health Insurance Administration (NHIA) – to exist for decades in a state of near-permanent financial crisis? Will it ever reach a state of stability? To get to the bottom of this issue, I sit down with Donald TF Shang, director-general of the Department of Social Insurance at the Ministry of Health and Welfare.
“So this is why some of your questions were so… vintage,” Shang says when I tell him that a snapshot of the NHI’s current financial state will not suffice. Having tracked the story for a decade and a half, I want the long-term, panoramic view of the NHI’s true financial situation.
Shang pulls out a chart showing two ascending lines. The blue line shows the annual costs of the NHI, while the dotted red line represents the income of the insurance scheme. The red line weaves around the blue line, sometimes going over it, sometimes dipping under.
When the NHI scheme was launched in 1995 the plan was to readjust the premiums every five years. In fact, a 2013 amendment to the National Health Insurance Law called for annual adjustments of premiums. But in practice, raising premiums is such an unpopular political move that rates have been increased only thrice, all when the red line dipped under the blue: first in 2002, again in 2010, and most recently in 2021. Read More…
