Taiwan’s plan to exempt an estimated 83% of senior citizens from paying national health insurance premiums has raised concerns over the long-term financing of its universal healthcare system, with the health ministry estimating that the measure could cost the government approximately NT$40 billion annually.
The opposition-backed amendment to the Senior Citizens Welfare Act, approved by lawmakers on October 16, would require the central government to fully subsidise National Health Insurance (NHI) premiums for residents aged 65 and older whose income falls below the tax filing threshold or is taxed at a rate of less than 20%.
An estimated 4.03 million people would qualify, prompting Health Minister Shih Chung-liang to warn that the legislation could undermine the system’s financial sustainability by extending assistance beyond households unable to afford their contributions.
Speaking ahead of the Global Health and Welfare Forum in Taipei, Shih described the amendment as “unreasonable,” arguing that income tax brackets alone were an inadequate measure of an individual’s ability to pay. He said subsidies should prioritize low-income and lower-middle-income households rather than apply broadly based on age and tax rates.
The health ministry estimates that annual subsidy costs could rise to NT$44.4 billion by 2029 and NT$62.9 billion by 2049 as Taiwan’s population ages. Officials have also outlined a hypothetical financing scenario in which working-age insured residents could face approximately NT$2,690 in additional annual premiums, although no such increase has been announced.
Taiwan’s NHI premium rate remains at 5.17%, unchanged since January 2021. The system is financed through contributions from insured individuals, employers and the government, with the amendment effectively transferring a larger share of those obligations to public funding.
The Taiwan People’s Party (TPP), which backed the legislation, disputed the government’s concerns, arguing that the subsidies would account for less than 1% of the annual government budget. The party maintained that existing laws already protect disadvantaged residents facing medical expenses.
TPP caucus director Vicky Chen said the amendment would free approximately NT$21.02 billion in local government funding currently allocated to NHI premiums, allowing those resources to be redirected toward assistance for vulnerable households.
The dispute comes as Taiwan faces rising healthcare expenditure. The country’s 2027 NHI spending budget has been set at NT$1.0434 trillion, with an additional NT$60 billion in government funding planned to support the system.
Despite the proposed premium subsidies, eligible seniors would remain responsible for applicable copayments and treatments excluded from public coverage. Under the 2026 NHI cost-sharing limits, inpatient copayments can reach NT$57,000 for a single hospitalization and NT$95,000 annually, excluding certain expenses outside the public scheme.
These coverage gaps remain relevant to Taiwan’s private health insurance market. Taiwan Insurance Institute data show that health insurance premium income among life insurers reached NT$457.5 billion in 2024, up 5.51% from the previous year. Supplemental policies can help cover expenses not reimbursed by NHI, although the proposed amendment would not directly change private insurance benefits or pricing.
Shih has also opposed a separate proposal to exempt children aged six and younger from NHI premiums, maintaining that government assistance should be based on households’ ability to pay.
The legislation has passed the Legislative Yuan, but the government and opposition remain divided over how Taiwan should distribute healthcare costs as its population ages.
