With the acceleration of China’s aging population and the continuous rise in medical expenses, the pressure on the Chinese Communist Party’s medical insurance fund continues to increase. Many interviewees pointed out that although the medical insurance fund still shows a surplus on the books, the contradiction between income and expenditure of the coordinated funds in some regions is intensifying. Some regions have started to supplement the medical insurance fund with new sources of funding, including diverting funds from lottery public welfare funds. However, due to the decreasing number of lottery ticket buyers in recent years, analysts believe this method may not be sustainable.
Data released by China’s National Healthcare Security Administration shows that in 2024, the total revenue of the basic medical insurance fund in China was approximately 3.48 trillion Chinese yuan, with total expenditures of around 2.97 trillion yuan, where expenditure growth continues to outpace revenue growth. The current balance of the national medical insurance coordinated fund is approximately 0.47 trillion yuan, with a cumulative balance of around 3.87 trillion yuan.
A public welfare activist from Jiangsu named Zheng Qiangdong told reporters: “From the official disclosed data, the national medical insurance fund still has a surplus, but some regions’ coordinated funds are approaching a balance between income and expenditure, even requiring local financial subsidies to maintain operations.”
One of the significant reasons for the increasing healthcare expenditure in mainland China is the continuous rise in medical demand. Official data shows that in 2024, approximately 6.7 billion outpatient settlements and 290 million hospitalization settlements were made nationwide, indicating a continuous expansion in the scale of medical service utilization.
Liu Kun, a medical industry professional in Beijing, told reporters that changes in some drug policies could also impact medical expenditures. He mentioned that some domestically produced drugs may not be as effective as imported ones, and with the gradual withdrawal of imported drugs from the Chinese market, some patients’ treatment periods are prolonged: “Many hospitals are overcrowded, and some medical institutions have cases of over-treatment, leading to an increase in hospitalizations. In addition, chronic patients require long-term treatment, which is costly, contributing to the rise in healthcare expenditure.”
At the same time, some regions are experiencing noticeable pressure on their medical insurance funds. Public data shows that the residents’ medical insurance fund in Beijing had a deficit of approximately 525 million yuan in 2024; whereas the Tianjin medical insurance fund has been in deficit for several years, necessitating the filling of gaps through financial subsidies and other means.
Liu Kun, during the interview, stated: “The growth rate of income for residents’ medical insurance fund is slower than the rapid growth of medical expenses, leading to a continuous increase in pressure on local medical insurance coordinated funds.”
Against the backdrop of rising pressures on healthcare funds, some local governments are seeking new sources of funding. An official from the Jiangsu Civil Affairs Department named Shen Jinbao revealed to reporters that authorities have been expanding the extraction of funds from the sales of sports lotteries and welfare lotteries in recent years, directing a portion of the lottery public welfare funds into social security-related projects to supplement medical insurance expenditures.
Shen Jinbao mentioned: “Initially, the lottery public welfare funds were mainly used for social welfare and social security projects. Now, some funds are being used to supplement medical insurance expenditures. The extraction rate was previously about a little over ten percent, and now it has increased to around twenty percent.”
However, he also pointed out that in recent years, there has been a decline in the number of people buying lottery tickets, leading to a slowdown in lottery sales revenue, affecting the stability of this funding source.
The National Healthcare Security Administration of the Chinese Communist Party previously mentioned in response to related suggestions that some regions are exploring avenues, like using welfare lottery public welfare funds, as a source of funding for long-term care insurance. Long-term care insurance is considered an essential component of the healthcare security system.
A public welfare activist from Chongqing named Mr. Pan told reporters that if the healthcare system needs to rely on the public welfare funds of lotteries to supplement funding, it indicates an increasing pressure on local medical insurance coordination.
He said: “However, lottery revenues themselves are volatile and may not be a long-term stable source of funds. In many areas, incomes are decreasing, fewer people are buying lottery tickets, and we have even seen cases of impoverished families buying lottery tickets here.”
The changing demographic structure of China is also considered a significant reason for the increasing pressure on the medical insurance fund. Official statistics show that the population aged 65 and over in China has exceeded 200 million, with the proportion of elderly population continually rising.
Mr. Pan, one of the interviewees, told reporters that in the early stages of China’s medical insurance system establishment, the population structure was relatively young, with a high proportion of contributors. He said: “As aging accelerates, the number of people receiving medical security benefits continues to rise, while the growth of contributing population has slowed down. This structural change will have a long-term impact on the stability of medical insurance funds.”
Mr. Pan also mentioned that CCP officials had publicly acknowledged problems with medical reforms over a decade ago, but the general public’s feedback on “difficult access to healthcare and expensive treatment” has not been fundamentally improved.
He stated: “CCP officials do not care about whether healthcare is accessible or affordable; they only care about making money. Many imported drugs are now restricted, but high-ranking officials have everything in their wards. Hospitals also take advantage to make money, and last year, many hospital directors and chief physicians were caught.”