Barriers of effective health insurance coverage for rural-to-urban migrant workers in China: a systematic review and policy gap analysis

Due to historical reasons, the Chinese welfare system is mainly financed at the local level [38, 64]. However, for local governments, even today, the local GDP growth rate is one of the most important political performance indicators [38]. Therefore, local governments are caught in a dilemma. On one hand, they need to expand welfare coverage to attract skilled migrants to contribute to local economic growth, but this raises the labor costs and increases local finance burdens [38]. On the other hand, they are reluctant to bear excessive financial burden because they need to control labor costs to attract investment funds [38]. To compromise effectively, the local government expanded the welfare coverage to the RUMWs with the desired skills and qualifications [33, 38, 64].

Business sectors face a dilemma similar to the local governments [65]. Since both the employee and the employer need to contribute to the employee’s welfare account, the high work mobility and low job stability of RUMWs could increase the burden for the employers [38]. Further, the Labor Contract Law bundles the health insurance premium with other welfare programs, such as pension insurance, unemployment insurance, on-the-job injury insurance, maternity insurance, and housing provident fund [38, 58, 65‐67]. This bundling leads to an increased burden for local governments and business sectors [38, 65]. As a result, the business sectors—especially private enterprises [64, 67] and small and medium-sized enterprises (SMEs) [68]—have adopted a similar strategy trying to avoid providing insurance coverage to all RUMWs [64, 65, 69, 70].

The local governments have now developed greater financial capacities to accommodate people that they had excluded before, but due to a lack assistance from government or nongovernment organizations [15, 28, 57] coupled with their disadvantaged and marginalized socioeconomic status, RUMWs remain in a weak position during negotiations with their employers [8, 64, 69]. Even when RUMWs sign a formal contract with their employers, they are sometimes hired by subcontractors or labor dispatch companies, and thus their labor relationship with their true employers are not clear and cannot be fully protected by the Labour Contract Law [14, 15, 57, 67]. Similarly, in cases where the employers refuse to pay premium for RUMWs [26, 65], the employer’s accountability is not supervised or well-regulated [15, 26, 67].

The evidence generated during 2013 and 2018 indicated that due to the fragmentation of its healthcare system [15, 38, 69, 70], health insurance portability or transfer in China is low [38, 64, 71‐74]. More recently, there have been reforms in both the healthcare and social security sectors, which lead toward the integration of NCMS and URBMI [75, 76]. Through this, the fragmentation of China’s health system should be greatly reduced. Yet the fissures between NCMS and URBMI or UEBMI still exist. Specific barriers that hinder the portability of health insurance are elaborated below (summary in Table 1).

The Interim Measures is a national level solution to the geographical exclusion caused by mobile employment, which allows insurance transfers between regions or between plans. It is an important policy for achieving effective coverage of the Chinese UHC. In the 2010 version of the Interim Measures [36], the stipulations related to RUMWs are: 1) no double coverage by the three basic SHI (i.e., NCMS, URBMI, and UEBMI); 2) the government flow-in area cannot refuse the migrant worker from taking part in the local SHI using the excuse of hukou²; 3) the RUMW, who has a stable labor relationship with a local institution, should be covered by local UEBMI; 4) the RUMW, who has an unstable labor relationship with a local institution, can voluntarily chose to keep their insurance in the flow-out place or to utilize the local basic health insurance; and 5) when the RUMWs return and if they still hold the rural hukou, they need to re-transfer their insurance back to the NCMS in their hometown.

However, none of these five stipulations consider the dilemmas faced by RUMWs illustrated above. The fifth stipulation can even cause loss in benefits to the RUMWs if they are covered by the UEBMI in their flow-in place. In addition, a lack of details in the Interim Measures has exacerbated the fragmentation among local policies since different regions have developed their own operational approaches for the SHI relationship transfer [71]. Studies also show that the transfer of health insurance for migrant workers does not work well [74, 80], especially for those who have high mobility [70, 90, 91]. Finally, what is noteworthy is that the ideas behind second and fifth stipulation are against with each other. The former one tries to weaken the influence of hukou, while the later one actually strengthens it.

In 2016, the Interim Measures were modified [37]. The newer version deletes the above five stipulations and seems to increase the mutual portability among three SHI. But how to understand and implement the Interim Measures almost completely depend on the local government. Due to the lack implementation details, local governments who have already formed their own rules are less like to revise or make the implementation more effectively [38]. More critically, the same as the 2010 version, the 2016 version does not touch the risk-sharing accounts that are highly related to the benefits of the local government. Problems elaborated in Barrier 2 are not tackled and the RUMWs’ primary health needs are not dealt with.

Another problem for current policies is the ambiguous description of eligibility. For most policies, the eligibility of local health insurance for the RUMWs is based on stable labor relations. However, what the stable means is not clear [38, 83]. This also gives the employer a chance to evade their responsibility, if they recruit workers from subcontractors or labor dispatch companies [14, 15, 57]. An additional question is which insurance self-employed RUMWs are eligible for, WMHI, UEBMI, or URBM? The related description about them are usually absent [14, 70, 83]. For instance, in Table 2, we will introduce next, none of Beijing, Shanghai and Shenzhen gave a clear statement.

The MWHI is specially designed for migrant workers. However, it has exacerbated the fragmentation of Chinese insurance system. In the trend of integration, some regions have begun to discard the migrant insurance, and integrate it into UEBMI or merge it with other health insurances. Table 2 compares before and after the reform of MWHI in Beijing [97‐99], shanghai [92‐96], and Shenzhen [100‐102]. MWHI is similar with NCMS in the view of insurance type, hence the difference between MWHI and UEBMI is significant, and previous comparison between NCMS and UEBMI also suit to MWHI and UEBMI. Integrated MWHI into UEBMI means a higher costs to RUMWs themselves, government and enterprises, and the selectivity motivation of government and enterprises is higher in via of UEBMI than MWHI. Therefore, before solving of the conflicts of stakeholders’ interests as well as the problems faced by RUMWs, it can be speculated that the forced integration will worsen the exclusion of RUMWs from the urban insurance system, especially for those who are treated as unskilled workers.

Among MWHIs in China, the model used in Shanghai and Shenzhen are considered positive examples [8].

As shown in Table 2, Shanghai provided insurance coverage for RUMWs through its comprehensive insurance system before 2011. Though this model was replaced by UEBIMI in 2011, its biggest innovation was that it was based on commercial insurance. Researchers advocated that this model should be promoted as it can be well suited to RUMWs’ high mobility and low stability because commercial insurance is not restricted by region [8, 83]. However, based on our earlier review, unless the premium under this model is paid by RUMWs themselves or by the government in their flow-out place, the commercial model still does not provide a good solution to the extra-cost problem caused by RUMWs’ high mobility and low stability faced by the government and enterprises in the flow-in place.

The innovation of the Shenzhen model lies in it combination of all health insurances into one after 2014, and in meeting different people’s needs by providing optional packages. The advantages of this model are that: 1) it reduces the fragmentation between plans; 2) it overcomes the barrier of using the family as the minimum financing unit, and increases the portability of health insurance; 3) the optional packages are more compatible with the low incomes of RUMWs; 4) it covers outpatient services and meets the RUMWs’ health needs; and 5) it is financed monthly and is more compatible with RUMWs’ high mobility. However, there are some weaknesses: 1) it lacks details about the eligibility of the self-employed RUMW; and 2) similar to the Shanghai model, the extra-cost problem faced by the government and enterprises remains, caused by the RUMWs’ high mobility and low stability.

A few articles compared China’s health system with those in other countries. Table 3 summarized what can be retrieved from approaches implemented in other countries or territories that face problems similar to China. In sum, in terms of migrant-workers’ problems of insurance coverage or access to health services, countries who have a national health insurance are more likely to demonstrate the advantage of their system. Establishing a separate health insurance with low premiums for migrant workers is not an approach unique to China, but other countries consider in detail the migrant workers’ characteristics, including low incomes and the need for more primary care. Based on the causes of the problems and the obstacles encountered in solving these problems, the European approach appears the most instructive for China.

Migrant workers are common in the EU [103, 104]. The biggest feature of the EU approach is that they consider the difference between countries; they steer clear of building one European system for all, but enhance the coordination among members from a legal level. The aim of regulations in the EU is to determine which national legislation applies to a migrant worker in all possible cases, and to avoid a situation where migrant workers are either insured in more than one Member State or not at all. The regulations have the following characteristics: 1) detailed explanations. For instance, article one of the regulations exhaustively enumerates and describes the definition of 27 related terms; 2) avoiding ambiguity. For instance, because of the situation, people may have business locally but not be employed locally. The definitions the regulation offer are “activity as an employed person” and “activity as a self-employed person” rather than definitions of a “worker” or “self-employed person”; 3) only providing the principles and leaving space for the member states, but the contents involved are comprehensive. For instance, contents include how to treat migrant workers, the rights and interests to be guaranteed, how to handle people who are double covered by multiple countries or people not covered by any country, how to solve the problem of reimbursement for medical treatment in different areas, how to deal with the cumulative of the set period, and how to cooperate and exchange between institutions or countries. Therefore, the European Commission not only provides guidance but more importantly offers coordination.