HEALTH A F FA I R S ~ Vo l u m e 2 2 , Num b e r 3 6 1

Taiwan’s health policymakers continue to tinker with the country’s

NHI, which covers almost all citizens with modest cost sharing.

by Tsung-Mei Cheng

(Taiwan) replaced a previous patchwork of separate social health insurance funds with one

single-payer, national health insurance scheme that is administered by an agency of the

central government’s Department of Health. Within a year this bold legislative act brought

the health care utilization rates of the 41 percent of Taiwan’s hitherto uninsured population

up to par with those of the previously insured population. This paper describes the achievements

of this policy initiative so far, along with the growing pains it has encountered, and

seeks to extract lessons from the experience for health policymakers in other countries.

1995 Taiwan established its universal National Health Insurance (NHI)

program. To prepare policymakers for this bold step, Taiwan’s planners had

studied health insurance systems abroad. The program, eventually blessed by the

legislature, has been described as "a car that has been domestically designed and

Although the main focus of this paper is Taiwan’s NHI, the discussion begins

with a brief overview of the health care delivery system to which the NHI provides

access and for which it is a major source of financing. Thereafter the discussion

shifts to the genesis of the NHI, followed by an overview of its modus operandi.

Next comes an examination of the growing pains encountered by the NHI scheme

and the government’s responses to these problems.  U.S. and Canadian readers may

find this discussion particularly interesting, as Taiwan’s NHI resembles the government-

run U.S. Medicare program for the elderly and the single-payer health insurance

programs operated by the Canadian provinces. Many of the problems encountered

by Taiwan’s NHI have long been familiar to these programs as well....