Address sustainability risks in health insurance funds: generational actuarial balance and intergenerational equity perspective

Abstract

Background: Public health insurance systems worldwide face growing sustainability risks due to aging populations and rising medical costs. China’s employee basic health insurance (CEBHI) system is particularly vulnerable, with concerns about generational actuarial imbalances and intergenerational inequities threatening its long-term viability. Methods: This study constructs an intergenerational accounting framework for the CEBHI system, analyzing its sustainability from the perspectives of generational actuarial balance and intergenerational equity. We evaluate the impact of potential policy adjustments, including delayed retirement age, retiree contributions, increased premium rates, and reduced reimbursement rates. Results: The findings reveal severe generational actuarial imbalances and intergenerational inequities within the EBHI system. While individual policy measures—such as delaying retirement, introducing retiree contributions, raising premiums, or lowering reimbursement rates—can partially mitigate sustainability risks, none alone achieves both actuarial balance and intergenerational equity. Policy coordination is essential. Notably, delayed retirement has a limited impact, whereas retiree contributions are critical in all effective policy combinations. Conclusion: To ensure the long-term sustainability of China’s health insurance fund, the government must adopt synergistic policy combinations, prioritizing reforms in retirement age and retiree contribution policies. Isolated adjustments are insufficient; integrated strategies are necessary to address systemic risks.