The National Development and Reform Commission (NDRC) has proposed the allocation of an additional 2.7 billion yuan (US$35.67 million) to improve the country's rural medical care system this year, on top of the government's 9.4 billion yuan pledge back in June.

The funds would be used to accelerate the development of the rural health care system and improve health care for China's rural population, according to a policy drawn up by the NDRC Social Development Department.

Observers say the proposal, which requires the approval of the State Council, is a recognition that the current investment is still insufficient in ensuring all rural residents are covered by the rural cooperative medical system.

Under the scheme, a participant pays an average of 10 yuan a year, while the government contributes another 40 yuan. The participant is then entitled to reimbursements as high as 65 percent of their total medical expenses up to 30,000 yuan.

However, reimbursement rates depend on the financial situations of local governments. Some cash-strapped western provinces are only required to reimburse patients 10 percent of their medical costs even though the participants in the scheme are paying as much as other people in richer provinces.

Out of 1.3 billion Chinese people, only 330 million were covered by medical insurance according to Ministry of Health (MOH) statistics in 2005.

The MOH reported in 2004 that 156 million rural people were participating in the new rural cooperative medical care network.

Fast forward to March this year and the NDRC claimed that 2,319 counties, or 81.03 percent of China's total, and 85.7 percent of rural Chinese were under the cooperative umbrella.

From 1965 to 1976 when the Chinese economy was strictly centralized, the national medical care system covered all urban and rural residents for life. The economic restructuring since the late 1970s changed the cover-all mechanism and left many people, particularly the urban poor and rural people, with no assistance.

Rising medical costs have become a major concern in China and upset many rural residents. In order to tackle complaints about limited access to medicine, the government began to increase funding for health care in rural areas and launched the rural cooperative medical care system in 2003 after the outbreak of severe acute respiratory syndrome (SARS).

In the first quarter of 2007, the NDRC said about 5.2 billion yuan was reimbursed to 74 million rural people.

The NDRC said efforts would also be made to strengthen the urban community health service this year. According to the 11th five-year (2006-2010) national health development outline, the government will supply every 30,000 to 100,000 urbanites with one community health service center. About 5,000 community health service centers and 18,000 smaller stations have been set up so far.

"The framework of a community health service system has been molded," said Ministry of Health official Jin Shengguo.

The government is expected to release its final plan on medical reform later this year, China Business News reported.

(Xinhua News Agency August 17, 2007)