China is to bring all its low-income residents under a medical assistance umbrella, the Ministry of Civil Affairs has announced.

The main three groups targeted by the plan, which is to be rolled out over the next five years, are those living in urban areas who claim minimum living allowance but are excluded from the medical insurance system, those who take out medical insurance but with a heavy economic burden, and those who have special difficulties in making a living.

The system will introduce subsidies in order to make medical services more affordable.

The ministry's statistics indicate about 22 million urban Chinese are registered recipients of the minimum living allowance.

The majority of these are unemployed workers and their relatives living in northeast, central and western China, according to the ministry.

Initial pilot projects will be launched this year continuing until 2007 in a number of cities and counties across the nation, said the ministry.

Over the next two years, the State will allocate 300 million yuan (US$36 million) towards running the projects.

Each province, municipality and autonomous region should choose at least one-fifth of its cities or counties to be included in the pilot studies.

Under the system, each area will have an urban medical aid fund to be raised through local government budgets, lottery funding and social donations.

The system is supplementary to the current basic medical insurance system for urban people, and represents an effort by the State to narrow the gap between the rich and the poor, said Mi Yongsheng, a senior official with the ministry.

"We expect to expand the system to the rural areas and finally weave a whole medical security net," he said.

But Mi admitted it would be difficult to ensure the "right" people to receive medical funding because it is hard to define "heavy economic burdens" and "special difficulties."

Since different places have different levels of minimum living subsidy, it will be left to local governments to decide who qualifies for medical aid, he said.

Pilot studies have already started in cities such as Dalian and Shanghai, both of which have included rural people into the system from the very beginning.

"They have provided a lot of good ideas such as setting up zero-profit drug stores and pre-treatment subsidies," Mi said.

(China Daily April 5, 2005)