Basic insurance fund operations stable, but challenges remain

China's basic medical insurance fund had garnered 3.4 trillion yuan ($470 billion) in revenue by the end of last year, and authorities said that the fund is operating in the black, but barely.

The fund received 2.7 trillion yuan in income in 2023 while spending 2.2 trillion yuan, leading to an annual surplus of 500 billion yuan, the National Healthcare Security Administration said during a news conference held on Thursday.

China's basic medical insurance consists of an urban and rural residents' program, which mainly targets the unemployed, school-age children and rural residents, as well as an urban employee program.

The administration said that its employees' program has recorded accumulative surplus of 2.6 trillion yuan.

"While the amount strikes as sizable, it is important to keep maintaining a rational scale because it relates to healthcare security of retirees," it said.

The fund for rural and urban residents registered an accumulative surplus of 760 billion yuan, but the balance is tight, it added.

The administration said that increased spending by the insurance program has created a tighter safety net for residents' healthcare.

Health expenditures are expected to keep rising due to the continuously aging population, the decreasing ratio of workers to retirees and overall socioeconomic development.

"Healthcare securities will continue to reform approaches to payment, reining in the growth rate of expenditures and the hospitalization rate to guarantee stable function of the fund," it said.