Insurance pools' merging in China needs careful design.

Chen Xinxin and colleagues' call for healthy ageing in China is encouraging.1Chen X Giles J Yao Y et al.The path to healthy ageing in China: a Peking University–Lancet Commission.Lancet. 2022; 400: 1967-2006Summary Full Text Full Text PDF PubMed Scopus (13) Google Scholar To address equity concerns and mobility difficulties, the policy recommendation of “establishing a unified national insurance system that encompasses all citizens, regardless of occupation, resident status, or place of residence”1Chen X Giles J Yao Y et al.The path to healthy ageing in China: a Peking University–Lancet Commission.Lancet. 2022; 400: 1967-2006Summary Full Text Full Text PDF PubMed Scopus (13) Google Scholar is justifiable. However, it deserves further considerations. Notably, insurance pools' merging could mismatch administrative authorities and expenditure responsibilities at different levels of the government, creating huge moral hazards. After merging, despite the upward transferal of some expenditure management authority (eg, benefit package formulation), the local governments would still have the supervision authority (eg, payment inspection and cost control). However, local governments no longer need to take the expenditure responsibility, which is instead borne by the higher level of the Government in charge of the insurance funds. Due to the information asymmetry, the higher level of the Government cannot perfectly monitor the behaviours of the local governments, nor can it directly inspect the medical institutions to detect fraud. In this case, the local governments have strong incentives to benefit medical institutions and insured people under their administration, with the tendency to relax regulations around cost control and overuse insurance funds. Thus, the merging of health insurance pools might need careful research. Two policy options can be beneficial to improve the current system. First, it might be necessary to develop a harmonised benefit package for local insurance pools based on the economic reality and cost-effectiveness analyses. Second, China can consider adopting the population-based risk adjustment method for cross-subsidisation among insurance pools.2Wynand P Randall P Risk adjustment in competitive health plan markets.in: Culyer A Newhouse J Handbook of health economics. Elsevier, Amsterdam2000Google Scholar I declare no competing interests. The path to healthy ageing in China: a Peking University–Lancet CommissionAround the world, populations are ageing at a faster pace than in the past and this demographic transition will have effects on all aspects of societies. In May, 2020, the UN General Assembly declared 2021–2030 the decade of healthy ageing, highlighting the importance for policy makers across the world to focus policy on improving the lives of older people, both today and in the future. Although rapid population ageing poses challenges, China's rapid economic growth over the past 40 years has created space for policy to assist older people and families in their efforts to improve health and wellbeing at older ages. Full-Text PDF Insurance pools' merging in China needs careful designWe thank Yian Fang for the letter and for allowing us to elaborate on the design of the national health insurance plan. In the Commission, we advocated a unified national plan because current insurance plans, with mostly city-level pooling, hinder healthy ageing.1 Full-Text PDF