Chinese Internet Giant Tencent Is Now Offering Health Insurance
Horowitz says the service lets users between the ages of 18 and 39 pay one yuan ($0.16) and receive 1000 yuan (about $163) worth of protection for a year. Or 300 yuan ($49) for those between the ages of 40 and 49.
If a user then shares the service or asks for a donation of one yuan, they will get an additional 1000 or 300 yuan in protection, depending on their age, for a 1 yuan contribution. The coverage is capped at 10,000 yuan ($1,634).
China's healthcare has changed significantly since 2003 and the government has boosted healthcare spending.
"The percentage of people covered by health insurance surged from 30 percent in 2003 to 95 percent in 2011," writes Yanzhong Huang in a CFR column. "As a result, the share of out-of-pocket spending decreased from 56 percent to 36 percent in that same period."
Chinese healthcare still struggles with two fundamental things: "access and affordability," he writes.
While this move by Tencent isn't a game-changer in and of itself, considering its limitations, we are seeing a broader trend of Chinese internet companies revolutionizing various sectors in China. The most visible one: the financial sector.
Tencent has already tied its financial product, Licaitong, to its messaging app WeChat.
Over the Lunar New Year holiday, Tencent also used WeChat to deliver virtual red envelopes of money to their family and friends, and getting users to tie their bank accounts to the app.
Chinese banks already feel threatened by these services. They've seen their deposits fall, been forced to raise their deposit rates, and are capping the amount of money individuals can move to these online financial products.