The ultimate goal of the reform is to include all the citizens in a multi-level health care and insurance system, according to Health Minister Gao Qiang.

Insurance underwriters will in the process have wide access to the health care market, according to Chen the CIRC official, as he also urged them to "seize the opportunity" to expand their medical insurance business.

Working together with the government finance and commercial insurance programs can, as he said, help China avert a dramatic rise in people's healthcare costs.

In fact, as early as 2004, the CIRC approved the People's Insurance Corporation of China (PICC) to run pilot programs in the healthcare market.

Nowadays, according to CIRC statistics, the demand for health insurance in the world's most populous country is expected to rise to no less than 3 trillion yuan ($390 billion) in 2008.

However, there are problems in matching the growing claims with the premiums, at least in some regions.

Tan Qijian, a senior manager of PICC Health Insurance's Beijing branch, told China Daily that some insurers had even suffered a loss of as much as 200 percent in recent years from health insurance schemes.

Wang Xianzhang, chairman of the Insurance Association of China, said a comprehensive medical insurance network required a joint effort by all sectors of society and the government.

He said the commercial health insurance industry was still fumbling in its attempts to properly integrate with the government framework of basic medical insurance for urbanites and rural cooperative medical care.

"The most important thing the government can do at this point is to define for us in the insurance industry what it will do and what is left for the industry to do," he said.

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