Taiwan’s National Health Insurance (NHI) budget has surpassed NT$1 trillion, and as cost-sharing increases, the gap that health intermediaries are expected to fill continues to widen. This situation has sparked a political debate over who should bear the financial burden of health coverage in Taiwan’s aging population. According to Taiwan’s Ministry of Health and Welfare, an estimated 4.03 million people would have qualified for the proposed premium waivers, highlighting the scale of the demographic challenge.
The government has refused to approve amendments that would waive NHI premiums for certain residents aged 65 and older, citing an estimated annual cost of NT$40 billion. These amendments, passed by the Kuomintang (KMT) and Taiwan People’s Party (TPP) in October 2026, would have required the central government to fully subsidize premiums for seniors with incomes below the tax filing threshold or taxed at less than 20%. The amendments specifically targeted changes to the Senior Citizens Welfare Act, reflecting a broader effort to address elderly welfare within existing legal frameworks.
Government objections and industry growth
The government argues that the measure would increase costs for insured individuals aged 15 to 64 by more than NT$3,000 (US$90) per year, shifting the financial burden to younger populations. Despite this, the personal accident and health insurance segment is projected to grow at a 7.4% compound annual growth rate from 2024 to 2028, according to GlobalData. Life insurers’ health insurance premium income in Taiwan reached NT$457.5 billion in 2024, up 5.51% year on year, showing the sector’s resilience amid fiscal pressures.
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Premier Cho Jung-tai has declined to sign the legislation, marking his ninth such refusal, according to Taiwan News. He cited three main objections. First, officials argued the amendments could reduce the ability of 66,000 low-income seniors to pay for medical treatment, as the new subsidies might replace more targeted local government support. Second, the changes would undermine the Cabinet’s constitutional authority to propose budgets. Third, the cost shift to younger populations is seen as contrary to intergenerational justice. Health Minister Shih Chung-liang further criticized the amendment as “unreasonable,” arguing that income tax brackets alone are an inadequate measure of ability to pay and that subsidies should target low- and lower-middle-income households more precisely.
Fiscal pressure and demographic changes
The NHI Committee has approved a 2027 spending budget of NT$1.0434 trillion, the first time it has exceeded NT$1 trillion. The government has proposed an additional NT$60 billion allocation for 2027 to support the NHI system’s financial reserves. The general premium rate remains at 5.17%, unchanged since January 2021. Meanwhile, inpatient copayment ceilings increased in January 2026 to NT$57,000 per hospital stay and NT$95,000 annually, according to the Bureau of National Health Insurance. These adjustments reflect ongoing efforts to balance fiscal sustainability with patient affordability.
Seniors already account for 42% of total NHI expenditure, and subsidy costs under the proposed amendments are estimated to reach NT$44.4 billion by 2029 and NT$62.9 billion by 2049. Taiwan’s demographic shift is significant, with residents aged 65 and older surpassing 20% of the population in 2025, classifying it as a “super-aged” society. Its total fertility rate dropped to 0.695 in the same year, 17% below the lowest government forecast, according to the Taipei Times. This rapid aging, coupled with low fertility, intensifies the strain on public health finances.
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Regional trends and industry response
This trend is not unique to Taiwan. In South Korea, medical spending on residents aged 65 and older reached 52.12 trillion won (US$38 billion) in 2023, accounting for nearly half of all insured medical expenditure. Japan is also considering raising medical cost-sharing ratios for people aged 70 and older, with its ruling coalition agreeing in July 2026 to draft a roadmap for these changes, according to Jiji Press. These regional developments show the shared challenges of aging populations across Asia.
Taiwan’s Financial Supervisory Commission (FSC) has encouraged insurers to develop more affordable products for the elderly and economically disadvantaged, including micro-insurance and small-amount end-of-life policies. Any expansion of supplementary health products aimed at seniors would be distributed through licensed brokers, agents, and bancassurance channels, as outlined in Baker McKenzie’s 2025 Asia-Pacific insurance distribution guide. The premier’s refusal to countersign the legislation creates a procedural obstacle, returning the amendments to the legislature for further deliberation, but does not permanently block them.
