President sets time frame for 2nd-generation health insurance plan

Ma issued the directive earlier in that day after being briefed by Department of Health (DOH) Minister Yaung Chih-liang on a temporary plan to increase the financially troubled national health insurance system's revenues before a second-generation plan comes into effect, Lo said.

The president also said that a consensus had been reached to adopt Yaung's plan to raise the health insurance premium rate from the current 4.55 percent to 5.17 percent.

Under the plan, which will take effect in April, 78 percent of those covered by the health insurance program will remain unaffected by the rate hikes. Only those whose premiums are calculated based on monthly wages of over NT$53,000 (US$1,680) will have to pay more.

The plan is expected to increase the health insurance system's revenues by NT$52.2 billion annually.

After the briefing, Yaung, who had tendered his resignation earlier this month over a disagreement on how to solve the national health insurance system's financial woes, said he agreed to stay on to lead the push for a second-generation health insurance system.

Many believe the premium system needs to be overhauled because it currently only considers individuals' salary and wages in calculating premiums rather than total income, which would include dividends, rent, and other unearned income.

But the government has yet to come up with a second-generation plan and decided to put in a place a simpler rate hike as a stopgap measure to keep the national health insurance system solvent.

Yaung said at a news conference later Wednesday morning that government subsidies to offset the rate hike will be based on three income brackets.

The government will fully subsidize the hike in premiums for those whose income for insurance purposes falls below NT$41,000 and 20 percent of the cost increase for those in the NT$42,000-NT$53,000 bracket.

Those whose premiums are based on incomes of over NT$53,000 will not receive any subsidies to defray the premium increase.

Yaung estimated that only about 13 percent of the insured would bear the full brunt of the rate increase while another 9 percent would have 20 percent of the increase covered by the government.

The plan is expected to expire in about two years when a second-generation health insurance plan is introduced, Premier Wu Den-yih said at the news conference.

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