China cuts medical benefits for seniors due to cash shortage

HONG KONG: China's government, strapped for cash after enforcing a costly zero-Covid policy, is cutting medical benefits and planning to raise the retirement age, in deeply unpopular moves that are fueling widespread public anger, CNN reported.

Thousands of elderly people have been taking to the streets since January to protest big cuts to monthly medical benefit payments. They've gathered in four major cities across the country, demanding local officials reverse the decisions. The changes are part of a national overhaul mainly intended to cover deficits in public medical insurance funds, according to analysts, which have been drained after paying for mass testing, mandatory quarantine and other pandemic controls over the past three years, CNN reported.

The demonstrations, dubbed by Chinese media as a "grey hair movement," are another rare rebuke for authorities after widespread protests gripped the country in November against Covid lockdowns. The anger could further undermine trust in the Communist Party already damaged by Covid lockdowns, banking scandals and a real estate crisis. Chinese officials appear to be worried that these protests could spread further.

Fueling the anger is a new drive by Beijing to push back the retirement age for all workers. For nearly three years, local governments bore the brunt of enforcing the now-defunct pandemic controls, resulting in soaring expenditures even as their income from revenue sources such as land sales slumped. The concerns were sparked after Guangdong province and the city of Dalian announced in 2022 that they would tap public medical insurance funds to pay for mass Covid testing.

The issue was exacerbated when, shortly after, the National Healthcare Security Administration (NHSA) said the money shouldn't be used in this way and that local governments should fund the testing with their own budgets. State media reported at the time that some other regions had already spent public money on mass testing. The reports triggered fears about the future sustainability of the already underfunded health insurance system, CNN reported.

China's health insurance scheme is a key part of its limited social safety net. It covers a portion of medical costs for current and retired workers in urban areas. Retirees don't need to contribute and receive a monthly payment into their personal accounts from the collective pool. After the reforms, which were introduced starting in January, payments to all personal accounts were reduced.

The elderly, who tend to have more medical needs, are more sensitive to the changes. In the central city of Wuhan, retirees saw monthly cutbacks of as much as 70 per cent.

Soon after the protests in Wuhan and the northeastern port city of Dalian, the NHSA issued a statement defending the policy, saying even though people would have less money in their personal accounts, there would be more funds flowing into the collective account as a result, CNN reported. To protesters, however, it looked like local governments were dipping into their individual accounts to cover the shortfalls of the collective pool. (ANI)

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