Research on the design of serious illness insurance scheme in Shanghai based on micro-simulation

BACKGROUND: Urban and rural residents’ basic medical insurance (URRBMI) is an institutional arrangement for rural residents and unemployed urban residents in China. The serious illness medical insurance system (SIMIS) was established to provide additional medical cover. At present, the SIMIS payment method in China is based on large expenses, and only a few areas, such as Shanghai, pay according to the treatment of serious diseases. This study aims to simulate and analyse the effect of the two payment methods on SIMIS in Shanghai. METHODS: We developed a micro-simulation model to predict the number and characteristics of SIMIS participants among urban and rural residents in Shanghai and to simulate the process of medical treatment, medical consumption, and medical insurance payments for each insured person from 2020 to 2025. We then summarised and analysed the payment compensation effect, and compared it with Shanghai’s current policies. RESULTS: The payment of SIMIS according to high expenses, the total medical expenses of seriously ill patients show an increasing trend, with an average annual growth rate of 3.56%. The URRBMI fund payment covers 56%–58% of total medical expenses, and the SIMIS fund covers 5%–7% of the total medical expenses. Both cover 62%–63% of total medical expenses. Self-payment under SIMIS covers 22%–23% of the total medical expenses, total self-payment covers 14%–15% of the total medical expenses, and the medical expenses borne by individuals cover 36%–38% of the total medical expenses.The fund expenditure is 213 million yuan and average annual cost borne by individual patients ranges from 40 000 to 60 000 yuan. CONCLUSIONS: The policy of designing SIMIS according to national guidelines does not meet the development needs of Shanghai. Shanghai should take the current policy of paying compensation according to the treatment of serious illness as the policy basis, consider the security needs of patients with large medical expenses outside the scope of protection, and adjust policies appropriately to prevent poverty caused by illness.