(December 14, 1998)
颁布日期：19981214 　实施日期：19981214 　颁布单位：国务院

It is an objective requirement and an important guarantee for setting up the system of socialist market economy to speed up the reform of medical insurance system and guarantee basic medicare for staff members and workers. On the basis of summing-up in earnest of experiences in experiment in medical insurance system reform at different localities in recent years, the State Council has made a decision that the reform of medical insurance system for staff members and workers in cities and towns shall be carried out nationwide.

1. Task and Principle of Reform

The main task of medical insurance system reform is to set up the staff members' and workers' basic medical insurance system in cities and towns, that is to conform to the system of socialist market economy and set up social medical insurance system to ensure staff members' and workers basic medical requirements according to the bearable abilities of finance, enterprises and individuals.

The principle of setting up the basic medical insurance system for staff members and workers in cities and towns is: basic medical insurance level should fit in with the development level of productive forces in the primary stage of socialism; all employer units and their staff members and workers in cities and towns should join basic medical insurance and possession jurisdiction shall be put into practice; basic medical insurance fee should be borne jointly by employer units and staff members and workers; combination in unified planning of society with individual account a for basic medical insurance funds shall be practised.

2. Coverage and Mode of Payment

All employer units in cities and towns, including enterprises(state-owned enterprises, collective enterprises, enterprises with foreign investment, privates ventures and so on), government organs, institutions, social organizations, people-run non-enterprise units and their staff members and workers should join basic medical insurance. It shall be decided by the people's governments of provinces, autonomous regions and municipalities directly under the Central Government whether rural and township enterprises and their staff members and workers and owners of urban and township individual economic organizations and their employees join basic medical insurance.

In principle, basic medical insurance takes the administrative areas above prefectural level as the overall planning units (including prefectures, municipalities, autonomous prefectures and leagues) and counties (municipalities) can also be the overall planning units. The three municipalities directly under the Central Government of Beijing, Tianjin and Shanghai shall, in principle, carry out overall planning citywide(hereinafter referred to as overall planning areas for abbreviation). All employer units and their staff members and workers have to join the basic medical insurance in their local overall planning areas in accordance with the principle of possession jurisdiction, and carry out the unified policy, and practise unified raising, use and management of basic medical insurance funds. The enterprises that extend across regions and have greater mobility in production, such as railways, electric power and oceangoing transport, and their staff members and workers can join basic medical insurance in other overall planning areas in relatively centralized ways.

The basic medical insurance fee should be jointly paid by employer units and staff members and workers. The rate of payment by units should be controlled at approximately 6 percent of staff members' and workers' total wages. The rate of payment by staff members and workers should be generally controlled at 2 percent of individual wage. The rate of payment by employer units and their staff members and workers can be correspondingly adjusted with the development of economy.

3. Establishment of the Overall Planning Funds of Basic Medical Insurance and Individual Accounts

The overall planning funds of basic medical insurance and individual accounts should be set up. The basic medical insurance funds should be composed of overall planning funds and individual accounts. The basic medical insurance fee paid by staff members and workers should be totally brought into the individual accounts. The basic medical insurance fee paid by employer units shall be divided into two parts: one part is used to set up overall planning funds, the other is put under individual accounts. The proportion put under individual accounts should generally be approximately 30 percent of that paid by employer units. The specific percentage should be decided by the overall planning areas in accordance with such factors as the scope pf payment for individual accounts and the age of staff members and workers.

The respective range of payment from overall planning funds and individual accounts should be delimited, separate accounting conducted, and no mutual diversion shall be allowed. The threshold standard and ceiling for payment from overall planning funds should be defined and the threshold payment standard shall be, in principle, controlled at approximately 10 percent of the local staff members' and workers' yearly average wages. The ceiling for payment shall be controlled in principle at the level of approximately four times of local staff members' and workers' yearly average wages. Medical expenses below the threshold standard for payment should be paid from individual accounts or by individuals themselves. Medical expenses above threshold standard for payment or below the ceiling for payment should be mainly paid from overall planning funds, a certain percentage should be borne by individuals. Medical expenses over the ceiling for payment can be solved through commercial medical insurance and other channels. The specific threshold standard for payment and the ceiling for payment from overall planning funds and the proportion of the medical expenses above threshold standard for payment and below the ceiling for payment borne by individuals should be decided by the overall planning areas according to the principle of determining expenditure by revenue and balancing revenue and expenditure.

4. Amplifying the Mechanism of Management and Supervision of Basic Medical Insurance Funds

Basic medical insurance funds shall be brought into specified financial accounts for management and the special-purpose funds shall be used for the special purpose, and no diversion shall be allowed.

The bodies handling social insurance shall be in charge of the raising, management and payment of basic medical insurance funds and should establish and amplify budgeting and final accounting rules, financial and accounting rules and internal auditing rules. The operating expenses of the bodies handling social insurance should not be drawn from the funds and it should be solved through financial budgets at different levels.

The methods of figuring interest of banks for basic medical insurance funds are: the portion raised in the current year shall be computed in accordance with the interest rate of current deposit; the principal and interest of funds settled and transferred from the preceding year shall be computed in accordance with the deposit interest of banks of lump-sum deposit and lump-sum withdrawal for the three-month period; the sedimented funds deposited into specified social security financial accounts shall be computed in the light of the savings deposit interest of small deposits for lump-sum withdrawal for the three-year period, and it should not be lower than the level of interest rate of the said grade. The principal and interest in individual accounts belong to the individuals and may be settled and transferred for use and inheritance.

Labor security and financial departments at different levels should strengthen supervision and management of the basic medical insurance funds. Auditing departments should audit the revenue and expenditure and management of bodies handling social insurance at regular intervals. Supervisory organizations for medical insurance funds should beset up in overall planning areas with the participation of representatives from the government departments concerned, representatives from employer units, representatives from medical institutions, representatives from trade unions and relevant experts, and social supervision should be strengthened over basic medical insurance funds.

5. Strengthening Medical Service Management

The scope and standards of services of basic medical insurance should be defined. The Ministry of Labor Security shall, in conjunction with such departments concerned as the Ministry of Public Health and the Ministry of Finance, formulate the scope and standards of basic medical services, and the measures for the settlement of medical expenses, compile the drug catalogue of national basic medical insurance, items of medical treatment, standards of medical service facilities and corresponding control measures. The departments of labor security administration of provinces, autonomous regions and municipalities directly under the Central Government shall, in conjunction with the departments concerned, formulate the corresponding standards and measures for implementation of the respective areas pursuant to the stipulations of the state.

Management of designated medical institutions(including hospitals of traditional Chinese medicine) and designated drug stores shall be exercised for basic medical insurance. The Ministry of Labor Security shall, in conjunction with such departments concerned as the Ministry of Public Health and the Ministry of Finance, formulate the measures for the examination and finalization of qualifications for designated medical institutions and designated drug stores. The bodies handling social insurance should, in accordance with the principle of simultaneous development of Chinese and Western medicine, taking account of both grass-roots, specialized and comprehensive medical institutions and facilitating the staff members and workers in seeking medical advice, take charge of defining designated medical institutions and designated drug stores and conclude contracts with designated medical institutions and designated drug stores to define their respective responsibilities, rights and obligations. Competitive mechanisms should be introduced when designated medical institutions and designated drug stores are defined. Staff members and workers can choose a certain number of designated medical institutions for seeking medical advice and buying medicine, and can also buy medicine with prescriptions at a certain number of designated drug stores. The State Administration of Drug Supervision shall, in conjunction with the departments concerned, formulate the measures for handling accidents of drug purchase at designated drug stores.

All localities should carry out the spirit of the Decision of the Central Committee of the Communist Party of China and the State Council on Public Health Reform and Development" ( Zhong Fa[1997] No. 3), and take vigorous action to press ahead the reform of medical and public health system, and enable the masses to have better medical service with less input of funds and promote sound development of the cause of medicine and public health. The system that medical service and medicine are computed and managed separately should be set up, and the competitive mechanisms of medical service and circulation of medicine should be formed, and medical expenses are controlled at a reasonable level; internal management of medical institutions and drugstores should be strengthened, acts of medical services standardized, number of staff reduced and benefit increased, and medical cost reduced; price of medical service should be straightened out, and on the basis of carrying out the separate accounting and management of medical service and medicine, reducing the proportion of the revenue of medicine making up the total revenue of medical service, the price of medical technical services should be reasonably enhanced; and professional and technical training and the education on professional ethics should be stepped up to improve medical service personnels' quality and quality of service; the distribution of medical institutions should be adjusted rationally, and allocation of medical and public health resources optimized, and community health services developed actively, and items of basic medical service in community health service integrated into the scope of basic medical insurance. The Ministry of Public Health shall, in conjunction with the departments concerned, formulate the scheme of reform of medical institutions and the relevant policy of the development of community health service. The State Economic and Trade Commission and other departments should cooperate with each other in earnest to do a good job of the reform of the system of circulation of medicine.

6. Appropriate Resolution of the Benefits of Medical Treatment for the Personnel Concerned

There shall be no change in the benefits of medical treatment for honorary retirees and veteran red armymen, and medical funds shall be solved through the original channel of funds, if there is difficulty in payment indeed, the people's government at the same level should help to solve. The measures for the management of medical services for honorary retirees and veteran red armymen should be formulated by the people's governments of provinces, autonomous regions and municipalities directly under the Central Government.

There shall be no change in the benefits for medical treatment for disabled revolutionary armymen above Grade II Class B, the medical expenses shall be solved through the original channel of funds and administered by bodies handling social insurance under separate ledgers. The inadequate portion for the payment of medical expenses should be solved by local people's governments.

Retirees shall join basic medical insurance, they do not pay the basic medical insurance premiums. The proportion of the amount of money charged into individual accounts of retirees and the medical expenses borne by individuals will be given appropriate preferential consideration.

Public servants of the state shall, on the basis of joining the basic medical insurance, enjoy the policy of medical subsidy. Specific measures shall be formulated separately.

In order not to reduce the present medical consumption level for staff members and workers in a number of specific industries and trades, and on the basis of joining basic medical insurance, as an interim measure, it should be allowed to set up enterprises' additional medical insurance. Enterprises' additional medical insurance funds within 4 percent of total wages should be paid from staff's welfare funds. To the portion that the welfare funds are inadequate to pay should be listed into cost upon verification and approval by financial departments at the same levels.

Basic medical insurance premiums of laid-off workers of state-owned enterprises, including both premiums paid by units and individuals should be paid by re-employment service centers according to the base number of 60 percent of local staff members' and workers' average wages in the preceding year.

7. Strengthening Organization and Leadership

The reform of the medical insurance system is of strong policy nature, and it involves vast staff members' and workers' vital interests and it is of vital importance to the development of the national economy and social stability. The people's governments at all levels should strengthen earnestly their leadership, seek consensus of opinion, enhance awareness, and do publicity and political and ideological work well, and make vast staff members and workers and all walks of life of society actively support and join the reform. All localities should, pursuant to the task, principle and requirements of the establishment of the system of basic medical insurance for staff members and workers in cities and towns and in the light of actual local conditions, meticulously implement through organization, and ensure the stable transition from the old system to the new one.

The work to set up the staff members' and workers' basic medical insurance system in cities and towns shall be launched at the beginning of 1999 and completed at the end of same year. The people's governments of provinces, autonomous regions and municipalities directly under the Central Government should formulate the overall planning of medical insurance system reform according to the requirement of this Decision, and submit it to the Ministry of Labor Security for the record. The overall planning areas should formulate plans for the implementation of basic medical insurance according to the requirement of the planning, and implement them upon examination and approval by the people's governments of provinces, autonomous regions and municipalities directly under the Central Government after submission.

The Ministry of Labor Security should strengthen guidance and inspection of the work of setting up staff members' and workers' medical insurance system in cities and towns, and study and solve the problems emerging in the work in time. The departments concerned such as the departments of finance, public health and drug supervision and administration should participate actively in it, coordinate closely with one another, and make joint efforts to ensure the smooth progress of the work of the reform of staff members' and workers' basic medical insurance system in cities and towns.