ABSTRACT
This chapter uses a revised version of multiple-streams framework to examine the urban health insurance reform in China and identifies challenges to the current multi-layered health insurance system. It finds that changes in political leadership and China’s transformation into a market-based economy created a window of opportunity for implementing a mandatory social health insurance system in the late 1990s. The social health insurance system was technically feasible because local experimentation showed that it could effectively curb the rapid growth of medical expenses. It also promoted the new ideas of individual responsibility and social solidarity that were endorsed by political leaders. The social health insurance system was the outcome of consensus-building among policy entrepreneurs. After years of substantial efforts, the government has established a multi-layered health insurance system covering urban employees, urban residents, and rural populations. However, the current multi-layered health insurance system is plagued by the problems of huge insurance fund deficits, insufficient financial protection for the insured, and insufficient medical protection for the elderly. How to provide affordable and sustainable healthcare for its population will remain an important task for the central government.
