The policy also provides 50 percent coverage of outpatient treatment for serious illnesses and family clinic visits, union officials said.

Unlike most commercial insurance coverage, the union policy does not exclude any of its retirees, even if they have pre-existing conditions.

But no coverage is provided during the first three months of enrollment, said Ni Huizhu, director of the Mutual Aid Association in the trade union. Benefits kick in at the start of the fourth month, Ni said.

The annual premium is 50 yuan (US$6). The maximum reimburse-ment is 40,000 yuan a year.

So far, 636 local businesses have enrolled 120,000 retirees.

Under the new national health-care reform that went into effect on January 1, employers and individuals must contribute more to a personal account and a "unified fund" to help cover medical bills.

Since retirees' pension is usually less than the salary of working people and their health usually poorer than workers', the policy can be a major boost, union officials said.

Shanghai Steamer Factory's Yu Shunkang said: "An estimated 20 retirees from our factory become ill every month. So our retirees were enthusiastic about this policy. All 4,400 retirees decided to enroll in the program." The factory pays 40 percent of each retiree's premium.

Officials of Shanghai No. 1 Municipal Engineering Co said they have set aside more than 60,000 yuan to pay for most of the first-year premium for its 1,227 retirees.

One of the firm's retirees, Zhong Rongmei, 58, who suffers from uremia, said, "It will save my life and my family's. My wife and I are both retired. My son is unemployed. The family really has difficulty with my monthly medical expenses."

(Eastday.com 04/26/2001)