Rapid Progress in Healthcare, Stagnation in Social Security

Illustration: The difficult lives of elderly people in rural China (Getty Image)

[People News] Recently, overseas media reported that the healthcare insurance department of Luoyang City, Henan Province, issued a notice stating that, starting from January 1, 2025, rural residents enrolled in the New Rural Cooperative Medical System (新農合) will only be eligible for outpatient reimbursement at designated township health centers and village clinics. Those seeking treatment at county hospitals will no longer be able to claim outpatient reimbursement. The reason given was that the healthcare insurance bureau must "consider the safety of the insurance fund and adhere to the principle of basic coverage."

According to the 2025 Henan Urban and Rural Residents Outpatient Treatment Policy published on the official WeChat account of the Henan Provincial Healthcare Insurance Bureau, the reimbursement rates for general outpatient treatment are as follows: 60% at village clinics and township health centers, 50% at county hospitals, and 40% at city-level and higher hospitals. The annual reimbursement limit is approximately 300 yuan.

The Chinese Communist Party (CCP) mandates that farmers pay for the New Rural Cooperative Medical System. In 2003, the personal contribution was only 10 yuan. By 2024, the insurance fee had risen to over 400 yuan—a 40-fold increase over 20 years, averaging an annual increase of nearly 20 yuan. However, after paying more than 400 yuan per person for medical insurance, farmers are now being told that starting in 2025, they will no longer be able to use their insurance for outpatient care at county hospitals. This is a clear example of the CCP’s inconsistency and unpredictability.

In the recently concluded Two Sessions (China’s annual legislative meetings), Premier Li Qiang stated in the government work report that, following a 20-yuan increase in 2024, another 20-yuan increase in the basic pension for farmers would be implemented in 2025. CCTV host Bai Yansong even seriously suggested, "Can the farmers' pension increase in small steps at a faster pace, rising by 20 yuan every year and doubling in ten years?"

According to the 2009 State Council Guidelines on the Pilot Program for Rural Social Pension Insurance, farmers initially received a basic pension of 55 yuan, which had risen to 123 yuan by 2024—an average annual increase of only 4.5 yuan. Compared to this slow growth, the 20-yuan increase over the past two years is indeed "unprecedented." No wonder the 2024 government work report proudly announced that the increase in the farmers' basic pension was 19.4% in 2024 and will be 17.4% in 2025. Bai Yansong’s "small steps, rapid progress" argument is not without basis.

However, even with this so-called rapid progress, in ten years, farmers will only receive an additional 200 yuan. What are the current pension amounts for farmers across different regions?

After the 20-yuan increase in 2025, the monthly pensions will be as follows: Yunnan Province: 143 yuan; Sichuan, Hunan: 145 yuan; Liaoning, Heilongjiang: 148 yuan; Anhui, Hubei, and 8 other provinces: 150-155 yuan; Fujian, Jiangxi, and 5 other provinces: 160-180 yuan; Hainan, Guangdong, and 7 other provinces: 190-239 yuan; First-tier cities: Shanghai - 1,340 yuan, Beijing - 927 yuan.

Beijing and Shanghai are relatively affluent cities, yet their pension levels remain significantly below the local minimum living standards. The fact that farmers' pensions are lower than the social minimum guarantee highlights a major issue. The minimum living guarantee is intended to reflect the amount necessary to maintain basic living standards in the area. This means that rural elderly individuals cannot rely solely on their pensions for survival; they need additional income to make ends meet. Consequently, many elderly people in their seventies and eighties in rural areas continue to take on odd jobs, as their pensions are insufficient, while their children, who are now of pension age themselves, are unable to support them.

In light of this situation, various experts and scholars have proposed that there should be a significant increase in farmers' pension benefits.

Notable economist Li Daokui has advocated for raising farmers' pensions. He pointed out that the current basic pension for farmers over sixty is less than 200 yuan per month, which starkly contrasts with the average pension of just over 3000 yuan for retired employees in the private sector and over 6000 yuan for those in government and public institutions.

Li argues that, morally speaking, farmers deserve the right to receive pensions, as this is a debt owed to them by the state. Farmers have historically contributed to the country by paying public grain and agricultural taxes, and later, migrant workers who moved to cities did not receive equivalent welfare benefits. The government has expropriated rural land to sell to real estate developers for profit, yet farmers have not benefited from any of these gains. Thus, farmers have already paid substantial taxes for the nation's development, and their contributions to urban residents have never ceased.

Second, the country has the capacity to increase farmers' pensions. If the pension for the 130 million farmers aged over 60 across the nation were raised to 800 yuan per month, the total annual pension expenditure would amount to 12.5 trillion yuan. This figure is relatively small compared to China's annual fiscal expenditure, which is close to 30 trillion yuan. Additionally, the share of pension spending in China's overall fiscal budget is significantly lower than that in developed countries, indicating considerable potential for enhancement.

Third, raising farmers' pensions could stimulate consumption and foster growth in domestic demand.

Is it likely that the Communist Party of China (CPC) will increase the basic pension for farmers to 800 yuan in one go? The answer is probably no. The CPC prioritizes the stability of its political power and has never truly aimed to improve the living standards of the populace as a governance objective. The so-called poverty alleviation efforts are primarily aimed at achieving political gains and enhancing international standing.

Rural medical insurance has seen an annual increase of 20 yuan, rising from 10 yuan to over 400 yuan over the past 20 years; meanwhile, the average annual increase in rural pension insurance before 2024 is just 4.5 yuan, going from 55 yuan to 123 yuan. When it comes to collecting funds from farmers, the CPC is quick and efficient, but when it comes to disbursing funds to them, it is notably reluctant. Farmers receive less than 2,000 yuan in pensions each year, yet they must pay over 400 yuan for medical insurance. After paying for this insurance, they often find that even visits to county hospitals are not reimbursed, highlighting the CPC's exploitation and deception of farmers. 

(This article was first published by People News)