Less than a week after China announced plans to reform its public health insurance scheme, Shanghai introduced supplementary private insurance that aims to make health care more affordable for the city’s residents.

People can purchase the secondary health insurance plan, offered by eight private companies, for a 115 yuan ($18) annual premium, which would reimburse up to 2.3 million yuan in medical costs not covered by the national plan, according to an official announcement Tuesday. The city’s 19 million residents covered under the public medical insurance scheme are entitled to purchase the new commercial product, which has no health- or age-related restrictions.

Shanghai resident Shen Jia, 41, purchased the product for her elderly parents and herself a day after it was launched, saying it made her “feel more secure.”

“Compared with the guarantee it provides, the price is really affordable,” Shen told Sixth Tone. “It didn’t cost me a single penny out of my pocket, as the sum was directly deducted from my public health insurance account. I feel like it’s literally costing me nothing.”

Shanghai’s new insurance scheme covers a maximum of 1 million yuan in hospital bills, as well as another 1 million yuan in expensive medications that are often required to treat rare diseases. The plan is now available for purchase on mobile payment app Alipay.

In the announcement, the insurers included a specific list of 21 drugs to be covered. The list includes Fabrazyme, which treats Fabry disease, a rare genetic disorder that can cause heart attack, stroke, and kidney disease. Though the disease is said to impact fewer than 400 people in China, annual treatment costs can be as high as 2 million yuan per patient.

Additionally, Shanghai’s city-specific insurance plan covers up to 300,000 yuan for cancer treatment at the Shanghai Proton and Heavy Ion Center.

Yao Xinggen, a veteran commercial medical insurance agent in Shanghai, told Sixth Tone that the new scheme is far cheaper than traditional private insurance plans, which usually cost over 7,000 yuan annually.

“More importantly, it was very difficult for people older than 60, or those with certain diseases, to pass the compulsory health checks to qualify for our products,” he said. “Insurers have typically declined such high-risk groups.”

Apart from Shanghai, several other places in China have introduced localized health care plans to ease the burden of medical expenses. Last year, the eastern province of Anhui rolled out a similar insurance scheme for a 66 yuan annual premium, while the southern city of Dongguan charges just 69 yuan per year. Both plans cover up to 3 million yuan in medical expenses.

Editor: Bibek Bhandari.

(Header image: People on escalators at a hospital in Shanghai, Oct. 15, 2020. IC)