China is working to create a multi-level medical insurance network covering all urban residents before the end of the year, according to the China-U.S. Social Security Symposium which opened on November 3.

It has bee revealed that the reform of the medical insurance network, launched at the start of the year, aims to cover employees of all sorts of enterprises in cities and townships, government departments, public undertakings, and social organizations.

The two-day symposium, co-sponsored by the Ministry of Labor and Social Security and LeBoeuf, Lamb, Greene and MacRaeL, a U.S.- based international law firm, will explore cooperation opportunities between the two nations in the field of labor and social insurance.

A senior official from the ministry said that the medical insurance network, adapted to China's socialist market economy, is a continuation of the medical insurance reform and trials in the 1980s.

Statistics show that by the end of 1998, more than four million active Chinese workers and over one million retirees had entered the medical insurance system, combining social pools and individual accounts.

This contrasts with the end of the 1970s, when the government was responsible for the medical payments of more than 75 percent of China's urban workers, and some 110 million Chinese were the beneficiaries of free medical service.

In 1978, the Chinese government paid more than 2.8 billion yuan in medical expenses for its citizens, or some 6 percent of the total wages of the working class.

The official said that although free medical services played a positive role in safeguarding the well-being of urban workers and social stability in the past decades, it is not adaptable to the needs of the socialist market economy.

The flaws of the free medical service system include heavy burdens on the state and state-owned enterprises (SOEs), the rapid rising costs of medical treatment, and a lack of a restrictive mechanism on both employees and employers.

The official said that with the completion of the nationwide medical insurance network for the urban population before year's end, the free medical insurance system and labor insurance medical system are expected to be gradually terminated after more than 40 years of operation.