BEIJING, Nov. 12 (Xinhua) -- China's rural cooperative medical insurance system, initiated in 2003 to offer farmers basic health care, has expanded to cover more than 85 percent of rural residents, China's health ministry spokesman Mao Qun'an said on Monday.

    "By Sept. 30, about 726 million farmers had joined the scheme, which accounted for 85.96 percent of the rural population in the pilot areas," Mao told reporters.

    The cooperatives now cover 2,448 counties, county-level cities and city districts, or approximately 85.53 percent of rural areas, Mao said.

    The four-year-old scheme, seen by many as a way to help Chinese farmers with virtually no medical insurance, requires a participant to pay 10 yuan (1.3 U.S. dollars) a year. State, provincial, municipal and county governments supply another 40 yuan (5.2 U.S. dollars) per person to the fund.

    When rural residents fall seriously ill, the pooled funds cover part of their medical costs. Coverage varies by illness and the actual expenses.

    Mao said that 35.3 billion yuan (about 4.77 billion U.S. dollars) was pooled by the fund in the first nine months of this year.

    The fund paid out about 22 billion yuan during the same period in reimbursements, Mao said. About 84.7 percent of the money went to in-patient charges and about 13.44 percent for out-patient services.

    "Beneficiaries from the new medical cooperative insurance reached 263.3 million person-times during the first three quarters of this year," Mao said.

    The spokesman said safe operation is of vital importance to the fund and the ministry has asked local health authorities to improve the monitoring and management of the fund.

    In 2006, the county government of Xichuan, central China's Henan Province, was found to have stolen 712,000 yuan (about 96,216 U.S. dollars) from the fund by issuing a false report on the number of farmers taking health check-ups.

    "All the money has been recovered and the head of the Xichuan health bureau was dismissed from his post, " Mao said.

    The director of the county's medical cooperative insurance management office and the heads of five township hospitals were demoted. Senior officials of another ten township hospitals received administrative disciplines.

    Mao admitted that the fund raising channels and reimbursement levels were still not satisfactory. "Under such a situation, any fraud or violation of the fund would greatly impact the development of the new rural medical cooperative insurance system and farmers' enthusiasm," he said.

    Under a five-year (2006-2010) government health plan released on June 7, the cooperative healthcare network will cover all rural residents by the end of 2010.

    Source: Xinhua