Basic healthcare insurance is to be provided to primary and high-school students, senior citizens and the unemployed in 79 cities on a trial basis. A document released by the State Council on Wednesday said the system will cover all cities by 2010.

This is one of the steps the central government has taken to extend to all its citizens the benefits of the country's economic development. The subsidies, from both local and central governments, will be at least 40 yuan (US$5.30) per person per year.

When combined with the healthcare insurance provided to workers in urban areas and the new rural cooperative healthcare system for villagers, the new scheme is expected to complete the healthcare security net that will hopefully cover all residents nationwide in the near future.

It is, of course, the duty of the government to relieve the burden of people's medical bills when the rapid increase in its revenue from taxes makes it possible for it to do so.

But we can't expect the net will be established overnight. It is first carried out in some cities on a trial basis because we need a gradual process to find out the problems and prepare to roll it out to all in need of it.

Also, a sound mechanism needs to be established to manage the security fund.

The misappropriation and embezzlement of social security funds in the past should serve as a warning that a sound management system and supervision mechanism are as essential as the fund itself.

With this health insurance, we have reason to believe there will not be so many sensational incidents involving hospitals refusing to save the life of a dying patient simply because he or she cannot pay the deposit, as that will be covered by the insurance.

Nevertheless, this subsidy won't solve the problem of high medical bills. Bills can be as high as several hundred yuan for the treatment of a common cold, which will not be covered by the insurance system.

So a reform of the medical care system needs to be carried out simultaneously to allow hospitals to provide good service at a reasonable price. Then medical bills will cease to be a burden on ordinary people.

(China Daily July 27, 2007)