The General Office of China’s State Council has given its views on providing critical illness insurance for urban and rural residents, which gives China's major critical disease salvation move a shot in the arm.

It is based on related guidelines drawn up by six government departments, in August 2012 and is expected to play an important role in standardizing and improving China's critical disease insurance, which ghas seen some success in pilot programs over the past three years. But, there are still problems, so the General Office has tried to clarify the critical disease insurance system and provide better standards and guidance for it. The following are highlights of the GO report:

First, it proposes that critical illness insurance cover more than 50 percent of medical expenses and should be gradually raised as insurance funds and management improve so that the patient bears less of the cost. For now, basic medical insurance for urban and rural people can generally cover 50 percent of medical expenses. With critical disease insurance, the future insurance reimbursement is expected to be above 70 percent, to solve the poverty problems caused by illness. In addition, the GO gives special attention to scientific management and asks the parties involved to develop more dynamic ways to adjust to the income of urban and rural people and encourages regional governments to find ways to favor those most in need to make the critical disease coverage more precise. The main purpose of critical illness insurance is to relieve patients of the burden of medical costs and reduce the chance that certain families are hit by great expenditures. Higher medical costs for critical illness need a better insurance compensation approach, so a limited amount of insurance can be used to help those in dire need.

Second, the GO calls for a better link between basic medical and critical illness insurance, medical and emergency assistance, and commercial health insurance and charitable help and emphasizes the need for those systems to play a distinct role, develop different methods, and combine policy making, remuneration and management. The whole point of this integration is to build an information sharing system as soon as possible, provide one-stop settlement services, and to ensure convenient access to medical insurance for those with critical illness. Those eligible for critical illness insurance should include not only those who are already poor before they get sick but also those who will be impoverished after paying their medical expenses.

Third, the GO calls for standardized critical illness insurance services and confirms the role of commercial insurance for critical illnesses. The idea of commercial insurance covering critical illnesses is to explore ways to give government a greater role in healthcare for institutional reforms in government functions and social governance. The GO wants the parties involved to protect the interests of certain people and find a dynamic adjustment approach to balancing critical illness insurance balance of payments and losses and to follow the principle of making both ends meet and only seeking small profits of commercial insurance through reasonable controls. The profits can be determined by the nature of the critical illness insurance. Commercial insurance companies should review critical illness insurance to improve their service capacity rather than focusing on short-term earnings.

In addition, risks should reflect the discrepancy between expected costs and practical results, with a balance in the medical insurance interests and commercial insurance interests. The GO makes it clear that surplus profits of commercial insurance beyond the contract costs should be returned to the medical insurance fund for urban and rural people. If the commercial insurance companies suffer a loss as a result of adjusted policies on basic medical insurance, the fund will share the loss s a sign of the fairness in government services.

Fourth, the GO asks the parties involved to increase policy support for the commercial insurance business and to cut their costs in critical illness insurance, and makes it clear that income from the critical illness insurance premium must be exempt from business tax or insurance supervision fees. There will be free insurance security money coming in the 2015-2018 period.

Fifth, the GO emphasizes the need to standardize medical services because the critical illness insurance system largely depends on the reasonable control of medical costs. It states that health and family planning departments need to better supervise medical institutions and medical service quality. Commercial insurance companies need to work closely with human resources and social security, and health and family planning departments on medical payment reforms. And there needs to be a clinical plan formulated as soon as possible, with better diagnosis and treatment standards, more standardized medical treatments, and medical costs kept in line. Critical illness insurance should be based on better medical services, medical security reforms, and centralized drug procurement. Better supervision of diagnosis and treatment technology and medical services can put a stop to medical risks and unreasonable expense, and is a fundamental way to guarantee long-term, stable development of critical illness insurance. It is only by forging a link between medical treatments, insurance and medicines that we can maximize the social benefits of serious illness insurance.