By 2009, accumulated National Health Insurance (NHI) liabilities had reached more than NT$60 billion (US$1.84 billion), to which NT$2 billion was being added every month. Not only was the public unwilling to accept an increase to health insurance premiums, but members of the Cabinet were also hesitant to respond to the situation.
At the time, the Ministry of Health and Welfare (then the Department of Health) made a Herculean effort to explain the situation to the public. Lee Chia-tung (李家同), Chen Shu-chu (陳樹菊), Sun Yue (孫越) and other like-minded individuals took on the role of spokespeople, producing a film that was shown in hospitals and clinics.
Thanks to the efforts, by 2010, the health insurance premium rate had been raised from 4.55 percent to 5.17 percent. As a result of the increase, the NHI’s financial situation started to stabilize: Not only were debts being paid, but a reserve fund was also being built up.
Former ministers of Health and Welfare know that any adjustment to the health insurance premium rate must be carried out in accordance with the law, but very few have been willing to tackle the problem head on. The reason for this is that as soon as a minister suggests raising the premium rate, he or she would be reprimanded both by members of the legislature and by the public, and the Cabinet would immediately cave in under the pressure.
In 2002, the only other minister to have raised the premium rate — Lee Ming-liang (李明亮) — stepped down as soon as the bill that would raise the payments was ratified. It seems every minister who raises the health insurance premium rate is fated to resign from their post.
It was therefore extremely difficult to bring the NHI’s finances back under control and build up the surplus of more than NT$200 billion.
Recently there has been talk of reducing the premium rate. Staff at the Ministry of Health and Welfare and the National Health Insurance Administration (NHIA) must be disappointed. Or could it be that there is a real need to reduce the premium?
First, the issue of the reserve fund needs to be taken into consideration.
The purpose of the reserve fund is to balance the NHI’s finances and provide a backup money supply in case there is a shortfall in cash flow. Sources of revenue for the reserve fund include surplus funds at the end of the financial year, late payment fees, proceeds from operation of the reserve fund, and funds raised from the taxation of alcohol and tobacco.
According to the regulations set out in the National Health Insurance Act (全民健保法), the reserve fund should, in principle, be equal to the amount spent on medical insurance in the past one to three months. By August, the reserve fund had reached a total of NT$208.5 billion, which is enough to cover 4.7 months’ worth of medical insurance expenditures.
Since the reserve fund has already met the required standard set out in the act, there is certainly an argument to be made for reducing the premium rate. Nevertheless, instead of simply reducing the premium rate, the NHIA should also take steps to share the proceeds with the public.
For example, the stable financial condition of the NHI could be used to step up reforms in the healthcare system, such as increasing resources for medical care in remote areas, easing the pressure on overburdened hospitals, improving payouts for new drugs and treatments, resolving the severe shortage of doctors in general medicine, surgery, gynecology, pediatrics and emergency care, and improving the overall quality of treatments.
It is regrettable that for the past few years, the ministry has failed to steer the health insurance administration in this direction.
To achieve the goal of a sustainable medical insurance system, the “second-generation NHI” should incorporate the NHI Supervisory Committee and the Committee for Agreement of NHI Medical Treatment Costs into a new “NHI Association.” Made up of stakeholders of the NHI system, members of the association would agree on the scope of medical treatment payouts and the level of insurance premium rate. In the event members are unable to come to an agreement, the health and welfare minister would adjudicate.
This would avoid decisionmakers within the government being placed in a difficult position and prevent any paralysis at the top levels. Also, representatives from all walks of life would shoulder equal responsibly for achieving a balanced budget and improving the management of the NHI system.
According to the regulations set out in the National Health Insurance Act, when the total reserve fund is less than — or in excess of — the previous one to three months of insurance payouts, or there is a change to the coverage or criteria for payment — which affects the ability to balance the NHI’s budget — the case would be referred to the association for adjudication. The association would also decide the premium rate at the end of every financial year. Therefore, when the association convenes, it would have the duty to either raise or reduce the premium rate.
In the past, political considerations have interfered with the adjustment of the premium rate. After two increases, the public is now finally able to stomach further arrangements. If the proposed reduction to the premium rate can help institutionalize the premium adjustment process so that it is no longer dependent on political calculation, then that would be a good thing for the NHI.
It is disappointing that it has so far not been possible to spend the budget surplus on improving healthcare. This is due to idleness on the part of the regulators. The establishment of a sustainable health system should trump everything else.
Yaung Chih-liang is a former minister of Health and Welfare.
Translated by Edward Jones
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017
RSS