Taiwan Introduces Universal Health Insurance

By Liu, Lillian | Social Security Bulletin, Winter 1994 | Go to article overview

Taiwan Introduces Universal Health Insurance


Liu, Lillian, Social Security Bulletin


After 8 years of deliberation and planning, Taiwan has adopted a compulsory, universal health insurance program for its residents (including resident aliens), to be effective January 1995.

The Labor Insurance program provides the most comprehensive of existing health insurance plans. It covers employees of firms, mines, and plantations with 5 or more workers, amounting to 68 percent of the covered population. In addition, there are special programs for farmers, civil servants, private school teachers, public utility employees, fishermen, some self-employed persons in service occupations, as well as the low-income population. Of the total population of 21 million in Taiwan, existing programs provide coverage to 12.2 million. The new National Health Insurance (NHI) will incorporate existing health care programs for different categories of the working population (including the self-employed), and it will expand coverage to employees of small businesses with fewer than five workers, the non-working population (for example, spouses, parents, children, grandparents, and grandchildren), and others who have not had the benefit of health insurance. Excluded from the NHI are military personnel who have access to special health care facilities. The new law is estimated to extend coverage to an additional eight million persons.

The new health plan covers preventive and maternity care, and outpatient and inpatient treatment (as all existing plans do) at private and public clinics and hospitals under contract with the Government's health administration. An important new feature is the preventive and immunization plans for children under age 3.

In response to employer resistance to increased financial obligations for health insurance, the NHI stipulates that local and central governments share part of the program funding with employers and employees. Respective shares of premium contributions by the employer, the insured, and the Government vary depending on special population groups covered, such as civil servants, private school teachers, or the unemployed and low-income families. Employees formerly insured under the Labor Insurance program will pay for the bulk of the additional costs for extending coverage to their hitherto uninsured non-working dependents. Existing provisions under Labor Insurance require that the employer pay 80 percent of the monthly premium and the employee pay only 20 percent. Under the new program, the employer contribution for an insured employee will be reduced from 80 to 60 percent and the employee contributions will be increased from 20 to 30 percent. Local and central governments that currently pay only for the administrative costs will contribute 10 percent of the premium under the new program. The insured employee will also pay contributions (equal to his or her own contribution) for each non-working dependent to be covered by the plan up to a maximum of five times contributions for five or more dependents. …

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