China: Tens of thousands protest healthcare ‘reform’
Lence Law reports
On 8th February 2023, tens of thousands of retired workers in Wuhan gathered at the city government building to protest against the upcoming new health care ‘reform’, known as the Implementation Rules for Outpatient Mutual Assistance Protection of Wuhan Basic Medical Insurance for Employees (《武汉市职工基本医疗保险门诊共济保障实施细则》). On February 15th, retired workers in Wuhan and Dalian took to the streets again to protest after a small protest by workers in Guangzhou.
The original employee healthcare system was divided into two parts for medical expenses: one part was the large collective fund covering all insured people, which was distributed according to needs. The other part is the personal account, which is calculated according to the individual’s tax, and is only used by the individual or his/her family. The proposed reform would have reduced the proportion of individual accounts, and the reduction transferred to the pooled fund.
Taking Wuhan as an example, before the introduction of the new regulations, retirees’ personal accounts depended on the individual’s age group and would be based on 4.8% to 5.1% of the individual’s pension in the previous year. The new rules, however, would reduce that to just 2.5% of the average basic pension.
According to the Answer of Wuhan Employee Medical Insurance Outpatient Mutual Assistance Protection Related Policy (《武汉市职工医保门诊共济保障相关政策解答》), after the implementation of the new system, the personal health accounts of Wuhan retirees will be reduced by an average of 1,992 yuan (£236.25) per year. Of course, the current employees were also affected, with an average annual decrease of 1373 yuan (£162.84). In order to “compensate” for the loss of this part of the personal account, local governments and hospitals announced that they would adjust the outpatient reimbursement ratio and the upper limit.
It was because of these attacks that workers and retired workers took action. The local governments promised their demands would be fulfilled but explained the detail of the reform, but workers kept demanding the totally revoking of the reform.
At the same time, the Chinese media were silent and information only spread through a small range on the internet. The western media reported on the movement, unfortunately with a large amount of imperialist and anti-China propaganda bias.
They partly highlighted some facts, but also hid the socialist slogans and songs that appeared in most of the march (such as the singing of the Internationale《国际歌》and Union is Power 《团结就是力量》). Their reporting contained falsehoods to make people believe that the movement is a signal of Chinese people embracing western capitalist institutions rather than a left-wing workers’ movement.
The next day, after the protest, the official WeChat account of the Wuhan Medical Insurance Bureau re-tweeted a private article. It claimed that the biggest beneficiaries of healthcare reform were retired workers and that the movement emerged only because of a lack of understanding and communication about policies.
In the next several weeks, with the persistent struggle of the workers of Wuhan, on 7th March, the official media, People’s Daily, posted a report that said four elements of the health care reform were to be scrapped. They concentrated criticism on the bureaucracy of the Wuhan Medical Insurance Bureau for carrying out a reform that damaged people’s interests. The local government and the health insurance bureau finally compromised and promised to cancel all reforms.
The government of Wuhan, also Dalian and Guangzhou, announced that there will instead be another reform that will “make people truly satisfied”. However, during the whole time, all the Chinese media, including the People’s Daily, still tried their best to hide the existence of the movement away from the people. The heroic Wuhan people won a battle, but not many other people get the full information of that.
Deficit crisis in employee health insurance
Since 2018, there has been a latent deficit crisis in employee health insurance. It is only because the Covid epidemic has led to a large decline in the number of medical insurance users, that the collective fund of employees has stabilised, with even an increase to the balance of the insurance fund.
In the post-epidemic era in 2023, with the global economic crisis, rising prices, and China’s ageing problem, the financial crisis of employee health care will be quickly exposed. This is the main reason why local governments are anxious to promote personal account reform.
The question we need to ask is, is this direction of reform really a good way? Or only some short-term measure with no help in the long-term, just like tearing down one wall of a house to rescue another more dangerous one? It seems the reform is to delay the bankruptcy of the pooled fund, but it does not really help workers to have stable health protection.
The latter may be more logical. Because, no matter what the angle of research and analysis, the fundamental problem of the health care system has always been the aging of the population, the decline of the number of payable young workers, and the inability of the health care system to meet the increasing medical needs, especially for old, retired workers.
For individual workers, the result of cutting personal accounts is that there is less money in personal accounts, even if it is claimed that overall public funding can be increased, this has no real impact. However, this is probably not the case in practice, because the money to protect the rights of workers has moved from an individual account to a collective pooled fund of lesser value in practice.
It means that workers’ health care is more dependent on the financial status of the collective fund. When financial problems arise, medical insurance can weaken itself to maintain operation, such as reducing the list of medical insurance drugs, taking high-priced rare disease drugs out of the system, adding various thresholds to reduce the use of medical insurance, and so on.
Many retired workers in Wuhan have mentioned that such a reform is a degradation of their health care. For example, the actual increase is not as large as the reduced personal account amount; patients being forced to go to selected hospital clinics to be prescribed medication and not being able to buy it directly from the pharmacy, results in additional expenses.
China’s healthcare system has experienced a step backward from the widespread view that it had once been a real socialist workers’ health protection. In addition, there is the historical problem of social care inequality between rural migrant workers and the employees of urban state-owned enterprises.
In the early days, many factories and companies hired workers without paying for their social insurance, in full, and the governments also acquiesced to this. Therefore, the Yangtze River Delta, the Zhujiang River Delta, and other regions can develop into large-scale economic centres in a short period of time, with extremely low labour costs. Today, these unpaid hidden costs either become the capital of enterprises or become the financial income of local governments.
To solve the financial problems of the employee healthcare system, it is also necessary to solve the historical injustice of social care and the ignorance of those remaining institutions that should be there to protect the rights of the working class.
From a workers’ standpoint, we can imagine many other healthcare reform programmes that could focus on making companies and the state more responsible for social security. For example, increasing the proportion of company payments, collecting taxes from companies, and injecting resources from the central finance into social insurance, such as medical insurance.
In the current social security system, such as medical insurance, there is no room for workers to participate and speak out, and most policy changes are biased toward the interests of capitalist enterprises. To build the health care reform that really satisfies people, it is necessary to develop the power of workers, unite together and challenge the current social system of ignorance and inequality. That means fighting for a genuine socialist health and social care system, free to use and available to all who need it.
