The financial pressure on the National Health Insurance (NHI) continues to rise, with expenditures projected to exceed NT$1 trillion next year and an annual shortfall of NT$70 billion. Hsien-Ming Lien, President of the Chung-Hua Institution for Economic Research (CIER), notes that the NHI’s dilemma stems not only from “hesitancy to raise premiums” but also from a deeper problem: a rapidly deteriorating demographic structure. The system is facing three major challenges: a shrinking labor force, an imbalanced intergenerational burden, and manpower shortages resulting from a low birth rate. If reforms are not implemented in a timely manner, the system’s sustainability will be difficult to maintain.
Supplementary Premium Reform is a Drop in the Bucket for the Deteriorating Financial Structure
President Hsien-Ming Lien analyzes that in the nearly 30 years since the NHI’s inception, premiums have been adjusted only three times. The excessively long intervals and large-magnitude hikes have made the financial structure increasingly unstable. The NHI premiums should be “adjusted marginally each year,” much like car insurance, to maintain the system’s health. Although the government intends to “increase revenue sources” through Supplementary Premium reform by switching to an annual settlement basis and raising the levy ceiling to NT$50 million, this will realistically only increase revenue by about NT$10 to NT$20 billion. This amount is a “drop in the bucket” compared to an NT$70 billion shortfall and comes at a high political cost.
Beyond the financial imbalance, Taiwan’s rapidly decreasing labor force and the rise of atypical employment have progressively weakened the premium base, which is primarily reliant on wages. Population aging has increased medical demand, with younger generations paying more while using healthcare services less frequently. Retirees, on the other hand, who have assets, contribute the least, leading to significant intergenerational inequity. President Hsien-Ming Lien emphasizes that income no longer reflects the actual ability to pay. He suggests that Taiwan should follow South Korea’s example by incorporating asset-based income into its assessment framework and advocates for establishing a “universal basic premium” system that would require all citizens to contribute according to their financial capacity, thereby ensuring fairness and long-term sustainability.
Embrace AI and Systemic Innovations to Tackle Emerging Workforce Shortages
The low birth rate has further triggered a shortage of medical personnel. The NHI’s challenge is not just “not enough money,” but also “not enough people.” President Hsien-Ming Lien recommends that the government take proactive steps to leverage AI and digital technology to alleviate the workload of medical staff. This goal can be achieved by implementing automated nursing record generation and developing telemedicine systems. He also suggests relaxing regulations to facilitate the return of dedicated night-shift and part-time personnel and to encourage middle-aged and elderly professionals to re-enter the medical field.
President Hsien-Ming Lien believes that for the NHI system to be sustainable, it must address both the financial and human resource aspects. This involves making contributions fairer and more equitable through systemic reform, while also strengthening the medical workforce through technological innovation. By promoting resilience in both finance and human resources simultaneously, the NHI system can progress steadily in the face of an aging population.
Author: CIER Editorial Team
Date: November 12, 2025