Since its launch in 1995, Taiwan’s National Health Insurance (NHI) program has become globally recognized as a model of success. Centered on fairness, mutual assistance, and affordability, the NHI aims to ensure that all citizens have access to healthcare services while reducing the risk of poverty due to illness. Over the past 30 years, the NHI has not only improved public health but has also made significant contributions to Taiwan’s social stability and economic development.

Contributions of the NHI system

The NHI has greatly enhanced access to healthcare services. Whether for residents in remote areas or patients with rare diseases, the system provides necessary medical care. Thanks to the NHI’s widespread coverage and convenience, Taiwan’s average life expectancy has risen markedly, while poverty related to medical expenses has significantly declined. Moreover, the system has helped drive medical innovation, such as the adoption of genetic testing technologies and reimbursement for new cancer treatments, further improving patients’ quality of life.

The NHI’s success has drawn international acclaim, serving as a reference point for other countries. Taiwan consistently ranks among the top globally in public health and healthcare services, underscoring the system’s efficiency and fairness. Beyond improving public health, the NHI has opened the door to greater educational and entrepreneurial opportunities, further supporting economic growth.

Financial pressures and global budget constraints

However, the NHI now faces serious financial challenges, particularly due to an aging population and rising medical demand. As of now, Taiwan’s health expenditure (CHE) accounts for around 7.3% of its GDP – significantly lower than Japan’s 11.1%, South Korea’s 9.9%, and the OECD average of around 9.2%. This relatively low investment in healthcare resources threatens the long-term sustainability of the system.

In addition, the constraints of the global budget have slowed the inclusion of new drugs, resulting in longer wait times for patients with rare diseases and cancer to access needed treatments. Stringent reimbursement guidelines have also increased out-of-pocket expenses for households, placing a heavy burden on low-income families.

Due to insufficient reimbursement, many medical institutions struggle to maintain normal operations, relying instead on the price gap between procurement costs and reimbursement prices for drugs to cover financial shortfalls. This drug price gap now amounts to NT$70 billion, which not only fails to relieve the NHI’s financial strain but may also incentivize providers to favor higher-margin drugs over those most suitable for patients, thereby undermining healthcare equity. The NHI Administration is urged to demonstrate real commitment to addressing the drug price gap by fostering dialogue among patients, the NHI, hospitals, and pharmaceutical suppliers. Only through cross-sector collaboration can Taiwan create a more stable and equitable medication environment.

Strategies for sustainable development of the NHI

To ensure the NHI’s sustainability, the government must adopt a range of proactive measures to address financial pressures. First, the NHI budget should be expanded, particularly for the inclusion of new drugs and treatments for rare diseases. Creating special funds outside the global budget – such as the cancer drug fund for new cancer drugs – and streamlining the review process to shorten patient wait times are strategies worth exploring.

Second, the referral system must be strengthened to enhance the capacity of primary care and reduce unnecessary use of advanced medical resources. Promoting family doctor programs and home-based care services would ease the burden on households while improving overall public health.

In addition, greater policy transparency is essential. Making information on NHI resource allocation publicly available would build trust and foster broader societal support for necessary reforms.

Taiwan’s NHI system has achieved remarkable success over the past three decades, becoming a global example of healthcare equity. Yet it now faces mounting challenges, including financial strain, slow drug inclusion, increasing drug price gap, and uneven distribution of medical resources. By increasing investment, improving the tiered care model, and enhancing transparency, the NHI will be better equipped to meet public needs and ensure sustainable development. The future of Taiwan’s NHI depends on everyone’s continued collective efforts to uphold and advance this landmark achievement in health equity.

For more information, please contact:
International Research-based Pharmaceutical Manufacturers Association (IRPMA)
9F-8, 188 Nanjing E. Rd., Sec. 5, Taipei 10571, Taiwan
Tel: +886-2-2767-5661    Fax: +886-2-2746-8575  |  www.irpma.org.tw