Under a new National Health Insurance system that will take effect next year, individuals who earn over NT$2,000 in interest on a single savings account will have to pay a supplementary premium of 2 percent.
Since the news broke this week, many people have been rushing to split up their deposits, causing widespread complaints.
According to statistics compiled by the Bankers Association, there are currently 15 million accounts in the country that generate over NT$2,000 in interest. It will keep banks terribly busy if half of the depositors move their money, and the Bureau of National Health Insurance (BNHI) will not get the premiums.
The BNHI thought the new measure would bring in NT$3 billion per year in revenue for the cash-strapped insurance program, but it totally forgot the "administrative costs" involved. The fees charged by banks for the collection service alone will total NT$3.2 billion.
This is the same mistake as was made in the case of the stock gains tax. The government had hoped the tax would increase revenue by NT$10 billion, but instead it caused the evaporation of NT$3 trillion in stock market capitalization.
Improvements are needed in many areas to ensure the sustainability of the insurance system. The Department of Health should not focus only on expanding its financial resources but should also pay attention to developing a reasonable use of medical resources. One way of achieving this goal is to raise co-payments to discourage unnecessary visits to the doctor.
Instead of allowing BNHI officials to always worry about finances, the bureau should hire a team of management experts to identify the problems in the insurance program and find effective solutions. (Editorial abstract -- Sept. 14, 2012)
(By Y.F. Low)