Tens of thousands of Chinese pensioners took to the streets on Wednesday to protest against health insurance reforms that were introduced as cash-strapped city governments sought to control spending in the aftermath of China’s costly zero-Covid policy.
Video footage obtained by the Financial Times showed the mostly elderly demonstrators facing off against hundreds of police in the central city of Wuhan and the north-eastern port of Dalian over the healthcare overhaul, which they argue will lead to reduced benefits.
The crowd chanted slogans such as “down with the reactionary government” and sang “The Internationale”.
The protests followed a similar demonstration last week in Wuhan, where retirees gathered to oppose the government’s move to divert money from a mandatory health savings plan for workers to a state-controlled outpatient insurance fund. The reforms took effect on February 1 in Wuhan.
The demonstrations highlight the financial challenges facing Beijing as it seeks to shore up China’s underfunded healthcare system and care for a rapidly aging population that declined for the first time in decades last year.
“The top priority of China’s health insurance reform is to cut costs even though doing so may lead to a reduction in benefits and anger the public,” said Xu Yucai, a former deputy director of the Shanyang County Health Bureau in north-western Shaanxi province .
China’s healthcare sector has come under severe financial strain during the pandemic because of Beijing’s zero-Covid containment policy involving mass testing, centralized quarantine and rolling lockdowns.
While that has mostly been unwound since December, local governments’ budgets have been depleted. In Wuhan, where Covid-19 was first detected, the state-run health insurance fund has been struggling with a short fall for years, according to people with knowledge of the matter.
To bridge the financing gap, local governments have turned to “personal spending accounts”, mandatory savings accounts that are financed by employers and workers and managed by the health authority.
China’s balance of personal spending accounts jumped more than fivefold to Rmb1.2tn ($175.3bn) in the decade that ended in 2021, benefiting in part from a surge in young participants with few healthcare expenses.
That had created an excess of resources that should have been allocated to areas with more urgent needs, authorities said. Since the beginning of this year, dozens of cities, including Wuhan and Dalian, have begun transferring a large part of PSA contributions to a state-controlled outpatient insurance fund.
Previously, workers with funds in their personal spending accounts could use the money to cover all of their doctor visits and medication, while those whose accounts were empty would have to find other means to pay for their medical expenses.
Under the reforms, authorities say all adults and retirees, even those without money in their personal spending accounts, will have access to subsidized doctors’ visits.
The Wuhan city government said last year that the changes would “effectively” ease people’s healthcare burdens.
But the protesters argue that the new outpatient insurance comes with a high deductible and low coverage, meaning it will cost them more to see a doctor.
“This is robbery,” said a protester in Wuhan. “The government wants to use my money to subsidize others without my permission.”
The protesters last week in Wuhan gave the authorities seven days to address their concerns but the city government has shown little sign of backing down.
“In the long run, everyone will get better off while sick people and elders will benefit more,” said the Wuhan healthcare security bureau in a statement.
Dozens of cities have also issued statements in recent days stressing the reforms’ benefits.
Healthcare experts said the changes helped those who made frequent visits to the doctor because they could claim more under the new system. Yet it would come at the expense of those who have not depleted their personal spending accounts, such as healthy older people.
Cai Jiangnan, director of Chip Academy, a Shanghai-based health consultancy, and a government adviser, said local authorities including Wuhan had gone too far with the insurance reshuffle.
“The authority should inform the public of the challenges facing the health insurance system,” said Cai. “It should also take into account how much the public can understand and tolerate the reform.”
Additional reporting by Wang Xueqiao