What’s new: The Ministry of Finance has urged local governments to set aside enough money for Covid-related expenses in the wake of a national ruling that requires localities to pay for mass testing out of their own pockets.
The ministry instructed local governments to ensure they can pay for necessary Covid control expenses such as vaccinations, and nucleic acid tests, also known as PCR tests, according to a readout of a meeting that the ministry held with local finance department officials.
It also advised provincial-level governments to use transfer payment funds from the central government and their own fiscal resources to top off financial support for lower-level governments so that they can pay their Covid-related bills, the readout said.
The background: The National Healthcare Security Administration (NHSA), which oversees the nation’s medical insurance system, recently settled a debate about who should pay for local governments’ regular-testing campaigns.
The NHSA said last week that these campaigns should be funded through fiscal revenue rather than medical insurance funds, which some local governments had previously said they would use to help cover expenses of their mass or regular PCR testing.
Medical insurance funds are contributed by employees and employers, and aim to reimburse individuals for the cost of their health care. Over the past few weeks, concerns have intensified that local governments’ use of the funds to pay for mass testing will consume resources that could have been used for residents’ health care reimbursements.
From the start of the pandemic in January 2020 until mid-April 2022, 11.5 billion PCR tests had been carried out in China, according to the National Health Commission. Zhang Yu and Gao Tuo, macroeconomic analysts at Huachuang Securities Co. Ltd., estimated in a report earlier this month that spending has been around 300 billion yuan ($45.1 billion).
Read more In Depth: As Mass Covid Testing Becomes China’s New Normal, Debate Grows Over Who Pays
Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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