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Watchdog acts to prevent medical insurance leaks, manage costs

Wang Xiaodong
Updated: Aug 5,2015 9:58 AM     China Daily

Medical workers conduct a health checkup for two senior citizens at their home in Jinzhou, Liaoning province, in April.[Photo/for China Daily]

Supervision of companies involved in a major national medical insurance program is to be intensified to prevent subscribers’ personal details from being leaked.

Companies that violate information security regulations will be severely punished, a senior official at the China Insurance Regulatory Commission said on Aug 4.

“We will protect the information of those insured by using a strict supervisory mechanism to ensure safety and prevent leaks so that information is not used for commercial purposes,” said Yuan Xucheng, who heads life insurance supervision at the commission.

Regulators will encourage commercial insurers to provide more and better services and to work with the government to better manage medical spending to reduce risks caused by increased medical bills, Yuan said.

“The China Insurance Regulatory Commission will carry out inspections and punish any irregularities by insurance companies to protect the interests of those who are insured,” he said.

By the end of the year, the program, aimed at alleviating the financial burden of those suffering from critical illnesses, will cover urban and rural residents who have joined China’s basic medical insurance system, except employees working in urban areas.

This is according to a guideline released by the State Council, China’s Cabinet, in July.

Under the program, such subscribers will have at least 50 percent of their medical care expenses that are not provided for under the basic medical cover reimbursed, and local governments will select commercial insurers for the program through bidding.

The program, which is being piloted in all 31 provinces, autonomous regions and municipalities on the Chinese mainland, now covers 700 million people.

By the end of the year when it is adopted in all areas of the country, it will cover nearly 1.1 billion people, according to Yao Jianhong, an official at the State Council’s Medical Reform Office.

Liang Wannian, deputy head of the office, said last month that the profit margins of the insurers in the program will be controlled at a reasonable level to ensure medical funds are used effectively and bring maximum benefit to subscribers.

Wang Hongzhi, a Beijing-based adviser on medical reform, said commercial insurers in the program receive all the information relating to the huge number of subscribers to the medical insurance system.

“It is likely that they use this information to explore the market for commercial insurance,” he said.

Clauses covering information protection should be written into the contracts signed between local governments and commercial insurers to better protect medical insurance subscribers’ interests, he said.