NHI premium raised

But the premium hike will only affect those with monthly income exceeding NT$60,000, accounting for 12 percent of the population, while the majority will receive government subsidies to offset the rate increase.

The plan was announced jointly by Premier Wu Den-yih and Department of Health (DOH) Minister Yaung Chih-liang, who decided to retract his tender for resignation and will stay in his post.

The decision on premium rate adjustment was adopted after Yaung gave a briefing to President Ma Ying-jeou and other senior officials on the hike proposal.

Yaung stressed the premium increase would have the minimum impact because it will leave 78 percent of those covered by the compulsory health insurance program unaffected and the government will subsidize the premium hikes for lower income policyholders.

Premier Wu said he is glad that Minister Yaung will now stay on the job to help complete the major reforms for the NHI program.

Yaung hinted that he may still have to the leave the post to a “more capable person” if new reforms cannot be carried out as early as possible.

Starting next month, Yaung said, only those whose premiums are calculated based on monthly wages of over NT$53,000 will have to pay more.

He explained 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.

This temporary measure is expected to expire in about two years after a second-generation health insurance plan is introduced, Premier Wu said.

The adjustment marks the second rate hike since the system was initiated in 1995,

The rate was last raised to 4.55 percent from 4.25 percent in September 2002 to reflect an increase in medical expenditures, said officials at the Bureau of National Health Insurance (BNHI) under the Department of Health (DOH).

The latest hike starting next month is expected to increase the health insurance system's revenues by NT$52.2 billion annually to help ease the system's financial burden slightly, according to the officials.

2nd-generation NHI

President Ma made a decision that a second-generation health insurance plan, which would calculate premiums based on total household incomes, will be introduced within two years, according to Presidential Office spokesman Lo Chih-chiang.

Ma issued the directive after being briefed by DOH Minister Yaung on a temporary plan to increase the financially troubled NHI system's revenues before a Phase II plan comes into effect, Lo said.

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, rentals, and other unearned income.

But for the time being, the government decided to put in a place a simpler rate hike as a stopgap measure to keep the national health insurance system solvent.

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