line. The _Di Bao_ program was expanded to cover all provinces by 2007, and its beneficiaries expanded from 4.5 million in 2004 to 34.5 million by the end of 2007 (World Bank 2009) ― though the average benefit per person dropped slightly from 76 to 70 yuan per person (World Bank 2008:79).<sup>12</sup> It is now the single most important social assistance program in rural areas (World Bank 2009). The program is designed to be mainly financed by local governments, with inputs from the provincial and central governments if needed (World Bank 2008:78). Finally, the Medical Assistance program (launched in 2003) initially aimed to help households who cannot otherwise meet the financial burden of medical care expenses, but is now geared to helping poor or other eligible households with the enrolment costs and co-payments associated with the national rural cooperative medical insurance scheme (NRCMS). This program is financed mostly from central, provincial and county-level sources. By the end of 2007, 29 million persons in rural areas benefited from this Medical Assistance program, the number nearly tripling since 2005.

The third set of programs consists of social insurance programs, which seek to provide greater security against health shocks and old age. The rural health insurance system (NCMS) is a voluntary health insurance scheme where the household and local governments contribute 40 percent each of the revenues, and the central government contributes 20 percent. Reimbursement used to be difficult to obtain, and covered little of the costs incurred for health care (World Bank 2009:126-7). Expansion of the program over the years has extended coverage and participation, and covers more of the costs incurred, though reimbursement rates remain low (Wagstaff et al 2009a, 2009b). As of 2007, it still met a small part of the needs for catastrophic coverage ─ on average, only 15% of the costs of inpatient treatment were reimbursed, and the reimbursement rate fell as the total costs of care rose (Yi et al 2009). This, then, offered highly inadequate protection against being pushed into poverty by illness, and studies have shown that uninsured health shocks reduce household disposable incomes and labor supply (World Bank 2009; Wagstaff et al. 2009b).

Significant proportions of urban workers are covered by formal social insurance programs: in 2007, around half of workers had pension coverage, 45 percent had Basic Medical Insurance, and 40 percent had unemployment insurance and work injury insurance (World Bank 2009: Table 6.71). These programs covered far lower proportions of the poor than the non-poor (World Bank 2009: Figure 6.74), but they were clearly in place for many urban workers. The rural pension system (funded mainly by personal contributions and collective subsidies) covered only about 10-11% of the rural labor force (World Bank 2009: Table 6.65), and coverage of the farm-based elderly population appeared to be particularly limited. Beneficiaries were highly concentrated in a few (mostly wealthy) provinces.

Rural social insurance for old age care has been particularly inadequate. In 2005, while nearly half of urban residents have pension income, this share is less than one in twenty in rural areas (Table 4). The customary pattern has been for sons to support their aged parents, except during the couple of decades when communes were responsible for all their members. In 1986, China began to explore alternative means to the traditional family-based old age support systems in rural areas (Wang 2006).<sup>13</sup> The Rural Elderly Social Insurance Program ( _nongcun shehui_

> 12 By 2009, the Di Bao program reached 47.59 million rural beneficiaries and the average benefits per person rose to 101 yuan (World Bank personal communication from a report under preparation).

> 13 Whereas consistently growing urban old age security systems have been in place since 1951, as a part of the nation building and socialist rhetoric of the Mao era, old age programs have been largely inaccessible to the rural

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