Role and challenges of Government-Supported Supplemental Private Health Insurance for Coverage of High-Cost Medicines in China

Abstract

Background​The rising cost of high-cost medicines (HCMs), particularly for cancer and rare diseases, has become a major healthcare challenge in China. While the National Basic Medical Insurance (NBMI) provides essential coverage, many HCMs remain excluded, leading to high out-of-pocket (OOP) expenses and financial burdens on patients. In response, government-supported supplementary private health insurance (SPHI) has emerged as a key mechanism for expanding HCM coverage. However, challenges such as adverse selection, regional disparities in coverage, and financial sustainability remain unresolved. This study aims to explore the development, challenges, and optimization strategies of HCM coverage under government-supported SPHI in China. Methods This study employs qualitative research design, incorporating policy analysis, product reviews, and semi-structured in-depth interviews with key stakeholders. The research is structured using the Control Knobs Framework, focusing on financing, reimbursement policies, operational management, and stakeholder behavior. Data were collected through a review of national and regional SPHI policies, an analysis of HCMs reimbursable drug lists, and 36 interviews with stakeholders, including patients, insurance companies, third-party administrators(TPAs), pharmaceutical firms, medical providers, and policymakers. Interviews were transcribed, coded, and analyzed using NVivo software to identify key themes and insights. Results The study reveals that government-supported SPHI has improved HCM accessibility for some patients, yet several challenges persist. The low-premium, inclusive enrollment model has resulted in a high proportion of pre-exsiting condition enrollees, leading to adverse selection and concerns about long-term fund sustainability. Additionally, significant regional disparities exist in HCMs reimbursable drug list, reimbursement levels, and payment models, contributing to inequities in access. The lack of a unified, scientific approach for determining HCMs reimbursable drug lists has further exacerbated inconsistencies, leaving many patients unable to access critical treatments. Interviews indicate that TPAs and pharmaceutical companies play a dominant role in shaping HCMs coverage, often without transparent decision-making mechanisms. Moreover, while patients benefit from reduced financial burden, limited reimbursement levels and restricted medicine lists fail to fully address their treatment needs. Conclusion Government-supported SPHI has played a supplementary role in improving access to HCMs in China, but issues related to financial sustainability, adverse selection, and regional disparities limit its effectiveness. International experiences suggest that financing mechanisms, such as tax incentives and tiered premium structures, could enhance sustainability. Additionally, integrating SPHI coverage decisions with national health technology assessments (HTA) and standardizing HCMs reimbursable drug lists could improve consistency and equity. Policy recommendations include introducing tiered pricing mechanisms, expanding financial incentives for healthy individuals to enroll, and strengthening collaboration between insurers, policymakers, and pharmaceutical firms. Future research should focus on evaluating the long-term impact of SPHI on patient health outcomes and financial protection.