Local Government Medical Insurance Funds Sink Into the Red
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Beijing and Tianjin are among a growing number of Chinese cities reporting deficits in their medical insurance funds for residents, as the country continues to grapple with an aging population, rising health care costs and slowing government revenue growth.
China’s capital had an annual deficit of 525.6 million yuan ($72.1 million) in its resident medical insurance fund, according to its 2024 municipal budget. In neighboring Tianjin, where the fund has been in the red every year since 2021, the city recorded a shortfall of over 1.3 billion yuan in 2024, driven by a 1.3% increase in expenditures. Both cities are covering the shortfalls by dipping into reserves that their funds amassed from their surplus years.
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- Beijing and Tianjin are facing deficits in their resident medical insurance funds due to an aging population, higher healthcare costs, and slower government revenue growth, with Tianjin's shortfall over 1.3 billion yuan in 2024.
- Nationwide, similar deficits are reported, with Shanghai experiencing a shortfall of just under 1.4 billion yuan in 2023, attributed primarily to reduced contributions and heightened healthcare expenditures.
- Policymakers are exploring reforms, including compulsory insurance enrollment and linking premiums to income, to address funding challenges and sustainability.
- 2021：
- Hangzhou's local government covered the deficits in its resident health insurance fund.
- Since 2021：
- Tianjin's resident medical insurance fund has been in deficit every year.
- 2023：
- Shanghai recorded an annual shortfall of just under 1.4 billion yuan in its resident medical insurance fund.
- 2023：
- The national resident medical insurance system had a modest annual surplus of 11.2 billion yuan, a sharp decrease from 2022.
- 2023：
- The cumulative balance of China's resident medical insurance funds stood at 766.4 billion yuan.
- 2023：
- The number of individuals paying into resident medical insurance funds fell by around 20.5 million, a 2% drop.
- 2024：
- Beijing had an annual deficit of 525.6 million yuan in its resident medical insurance fund.
- 2024：
- Tianjin recorded a shortfall of over 1.3 billion yuan in its resident medical insurance fund.
- August 2024：
- The State Council introduced new policies to improve coverage and increase reimbursement limits for major illnesses.
- By 2025：
- Local governments' contribution to resident health insurance funding had slipped to 62.6%.
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