The Impact of Universal Two-child Policy on the Solvency of Pooling Fund of Basic Medical Insurance for Urban Employees: Improving or Worsening?

Abstract

With the rapid population aging, the payment pressure of China’s social insurance fund is increasing year by year. To relieve population aging and solve relevant problems induced by population aging, China’s fertility policy changes from selective two-child policy to universal two-child policy. Taking basic medical insurance for urban employees for example, this paper establishes actuarial models to quantitatively analyze the effect of fertility policy adjustment on the pooling fund of basic medical insurance for urban employees. The results are shown as follows: firstly, according to the existing system mode, if selective two-child policy is still employed, the accumulated deficit of the pooling fund will appear in 2040, and the accumulated deficit of the year of 2065 will be 62440 billion yuan; secondly, after implementing universal two-child policy, under different fertility willingness, the time of accumulated deficit will not be changed, but the accumulated deficit of the year of 2065 will decrease by 5.33% to 40.73%; thirdly, if the retirement age is further delayed 6 months per year from the year of 2022 until the retirement age is up to 65 years old, under different fertility willingness, the time of accumulated deficit will be postponed 7 to 25 years, and accumulated deficit of the year of 2065 will decrease by 63.59% to 98.99%. Therefore, universal two-child policy can decrease the accumulated deficit of the pooling fund of basic medical insurance for urban employees, and can be implemented accompanied by delayed retirement age and other policies, to further promote the sustainability of the pooling fund.