Shenzhen municipal government plans to launch a compulsory medical insurance program for 1.01 million children by the end of the year, the municipal labor and social security bureau told a public forum yesterday.

The 1.01 million children include all children at Shenzhen schools and those under 18 who are not in school but possessing a hukou or residence permit, according to a draft hospitalization insurance program for children. Two-thirds of the children covered will be migrants, said Yuan Jianyong, vice director- general of the labor bureau.

The program will pay 50 percent to 90 percent of the hospitalization costs for the insured children, with a ceiling of four times of the average annual salary of the previous year, according to the draft. The ceiling for the year 2006 will be 127,728 yuan (US$15,749), said Yuan.

The government will pay 36 yuan of the 180-yuan annual premium, while the children's parents and the parents' employers will each pay 72 yuan, according to the draft. Impoverished families with hukou will be exempt from the premium.

Some people have warned that the insurance might increase the burden of employers. Chen Nanxian, a teacher, suggested employers pay the premium from their pre-tax revenue. Tang Tingfen, a professor with the Shenzhen Academy of Social Sciences, warned that children faced the risk of losing the insurance cover when their parents changed jobs.

Yuan said the insurance scheme would help employers maintain a stable workforce. "We have talked with many employers, and most of them support the insurance program," said Yuan.

China did not have a national medical insurance program for children. As of now only three cities -- Beijing, Shanghai and Suzhou -- have medical insurance program for children.

The labor bureau said it would try to prepare a final plan by the end of the year. The first draft of the program, released in February, covered only 930,000 children. School-going children whose parents did not join the city's insurance scheme and other children above 3 years old were not covered under the first draft.

(Shenzhen Daily March 21, 2006)