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China's rural medical care system will cover more than 80 percent counties, said Premier Wen Jiabao at the opening meeting of the Fifth Session of the Tenth National People's Congress (NPC) in Beijing on Monday.

"The trial area of the new type of rural cooperative medical care system will be expanded this year to cover over 80 percent of all counties, county-level cities and city districts in China. Areas possessing the proper conditions may expand the trial faster than others," said Wen in the government work report delivered to 2,890 NPC deputies at the annual session of the top legislature.

The allocations from the central government budget to subsidize this trial will amount to 10.1 billion yuan (US$1.3 billion) this year, a 5.8 billion yuan (US$750 million) year-on-year increase, according to the government work report.

NPC deputy Li Changshui, a village head from Hunan Province, said the move shows the strong commitment and resolution of the central government in improving the lagging-behind rural health service system in the approach to build a new socialist countryside.

Under the new cooperative medical care program launched in 2003, a farmer participant pays 10 yuan (US$1.3) a year, while the state, provincial, municipal and county governments jointly put in another 40 yuan (US$5.2) for the cooperative fund.

The participant can have part of his expense reimbursed in case he is hospitalized. The rate of reimbursement varies according to different kinds of illness and the actual cost of medical expenses incurred.

Rural Chinese people used to have access to subsidized health clinics run by "barefoot doctors", who were mainly middle school graduates trained in first aid. This service, essentially free, helped almost double the country's average life expectancy from 35 years in 1949 to 68 years in 1978.

When China began its economic reform in the early 1980s, the old system was ended as the country attempted to switch to a market-oriented health care system. But the government failed to establish a viable substitute, leaving almost 90 percent of the rural population without health insurance, according to the Ministry of Health.

In 2003, the average annual income for China's 745 million rural populations was 2,622 yuan (US$328) while the average medical expenses were 2,236 yuan (US$280) according to the Ministry of Health in 2004.

A national health survey in 2003 revealed that about 73 percent of people in rural areas who should have sought medical treatment chose not to do so because of the fear of high cost.

"Once the ambulance siren wails, a pig is taken to the market; once a hospital bed is slept in, a year of farming goes down the drain; once a serious disease is contracted, 10 years of savings are whittled away," said a well-known Chinese countryside saying.

Thanks to the new cooperative scheme, 410 million farmers among 1,451 counties had joined the program, accounting for 50.7 percent of the country's total, said the government work report.

So far, China's central and local governments have invested over 18.9 billion yuan (US$2.4 billion) into the medicare scheme.

A survey jointly conducted by Beijing University, the Chinese Academy of Social Sciences, the Ministry of Agriculture and the Ministry of Health released early this year found that more than 57 percent of rural families that joined the system had made claims by 2005.

Families were reimbursed 25.7 percent of their total medical expenses, with an average refund of 731 yuan (US$95) according to the survey that polled 19,195 rural families in 32 counties of 17 provinces.

It also showed that 90 percent of families who participated in the program are willing to stay in the system.

However, the national drive also faces difficulties.

"Some counties and towns do not have enough financial power to supply their portion in the fund," said NPC deputy Xu Geliang, a hospital head in Anhui Province.

In addition, many clinics are in shortage of eligible doctors and equipment. In over 1,600 clinics in China's east Anhui Province, there are only 723 college graduates, less than two percent of the total number of doctors. Half of the clinics are not equipped with stomach pumps and 30 percent without electrocardiographs.

For village clinics, the situation is even worse.