Research On Reform And Development Strategies Of Critical Illness Insurance Scheme For Residents In China

The Critical Illness Insurance(CII)scheme,partnering with Basic Medical Insurance(BMI)system,is constructed to provide further reimbursement of medical expenses for patients with severe illness.The CII scheme is led by government and undertook by insurance corporations,serving as a pioneering attempt of public-private-partnership.Directed by Institutional Economics,this thesis introduces the state model of government providing social medical insurance,the adverse selection model and moral hazard model of market providing commercial health insurance driven by asymmetric information,which derive two patterns of cooperation between government and market in the field of public healthcare,namely,coinsurance and reinsurance.Then,the significant influence exerted by path dependency and institutional transformation on the organizing and implementing of CII is stressed.The designing of CII scheme varies among different regions across China,based on which three representative models are presented,including Luoyang Model featuring principal-agent and coinsurance,Zhanjiang Model featuring contract-signing and coinsurance as well as Xiamen Model featuring government-enterprise cooperation and reinsurance,which play an essential role in easing the financial burden of patients.However,critical defects also exist simultaneously from the perspectives of theoreticalunderstanding,scheme designing and operational practice,resulting in the reflections and reform on CII scheme.In terms of theoretical understanding,this thesis argues that CII scheme is significantly different from BMI system by nature,and the CII scheme should be oriented as an independent and supplementary medical security.To support the argument,an income-expenditure model of basic medical fund covering CII premiums is constructed.Besides,preferential regulation for impoverished groups is undesirable because it will dis-equilibrate the actuarial balance of CII and confuse the boundary of multilevel medical security system,particularly,CII and Medical Assistance Scheme(MAS)for residents.The Law of Large Numbers should not be applied rashly to improve the pooling level of CII without thinking about its prerequisite,namely,similar properties and insured amount,because of the varying compensation levels in different regions,or it may cause financial risk for insurance corporations.Similarly,we should show restraint and keep prudent to extend the coverage of CⅡ scheme to employees.Empirical evidence is provided through underwriting-scale and financial stability model.As for the designing of CII scheme,in addition to traditional means like Empirical Frequency,Conditional Pareto Distribution and Extreme Value Theory,the calculation of premium by Pricing Model of Obstacle Ratchet Options is explicitly introduced.The pay-line set at per capita disposable income by domestic standard is higher than that of international one,both are lower than the top-line of BMI.In other words,the CII and BMI form a mode of coinsurance,while the other mode,reinsurance,whose pay-line is set at the top-line of BMI,is deemed to be better from the point of academic interpretation of coinsurance and the construction of multilevel medical security.Besides,the span of compliance disastrous expenditure is proposed to be compressed,namely,reducing the top-line as well as expanding drug list and reimbursement ratio.Thus,the top-line must be retained and is suggested to set at 6 times or so of the pay-line.What counts is that the reforms mentioned above must be implemented in accordance with that of BMI and MAS.The mode of equally distributed interval stands out of alternative choices and to divide 4-5 intervals is preferred,through which the CII scheme could maintain brief and the moral hazard risk can be hedged.Empirical model shows that the increase of low-level reimbursement ratio contributes the most for easing the financial burden of patients in general.Based on the samples from Xiuning county during 2017,the premium for CⅡ,ranging from 35-40 yuan per person,which is higher than 29 yuan,is calculated through Empirical Frequency Method instead of the Pricing Model of Obstacle Option,because the sample data does not subject to log-normal distribution.This reveals a universal phenomenon existing in most regions that the funding level is insufficient to cover the compensation expenditure of underwriters.Without loss of generality,it is advised that the out-of-pocket expense should take up to 30%of total cost,based on which the efficient amount of fiscal subsidy can be estimated.From the perspective of operational practice,this thesis analyzes the macro policy risk,median market risk and the micro operating risk faced by insurance corporations.Policy risk consists of the designing,implementation and adjustments of CII and relevant schemes,as well as the crowding-out effect exerted by social insurance on commercial ones.Market risk stems from price competition in most cases.By figuring out the construction of gross premium,namely,risk premium,margin of safety,pure premium and additional premium,the basic requirements for rational price competition are raised.The measures to be taken to control the world-wide problem,medical expenses,which is the core of operating risk,includes comprehensive cost settlement and the emphasis on preventive consciousness,combined with ’voting with feet’ and compensation on demand side learned from western countries.Every coin has two sides.The operation and management of CII is benefit for insurance enterprises to enhance the company’s image,accumulate customer resources and,most importantly,collect large amount of statistics which are helpful for actuarial hypothesis and developing new life insurance products.The transformation of financial regulations also brings a rare opportunity for protection-oriented life insurance products like catastrophic illness insurance.Finally,this thesis enquires into the challenges and opportunities brought by Artificial Intelligence with its rapid development and permeation into insurance industry.It is the overt plot to reconsider and reform the CII scheme from the perspectives of theoretical understanding,scheme designing and operational practice,while the covert plot throughout the thesis is to form a multilevel medical security system with orderlyconnection and clear positioning.The reform and development strategies of CII scheme are put forward based on the two logics above.Any single scheme is insufficient to cover the medical expenses of patients with severe illness,thus a multilevel-system including BMI,CII,MAS as well as commercial insurance is indispensable.All the reform measures should be proposed to explicit the function and clear the boundary of medical security system,playing the resultant force of different schemes.