Dope idea. It’s only for serious illnesses but still.

https://www.wsj.com/articles/cant-afford-surgery-in-china-millions-chip-in-half-a-penny-to-cover-you-11555772400

Can’t Afford Surgery? In China, Millions Chip In Half a Penny to Cover You

When a 5-year-old girl in Shanghai suffered brain damage late last year after falling off a bunk bed, millions of strangers all over China helped foot her surgical bills.

The child’s family didn’t pay anything upfront for the coverage, and received a 300,000 yuan (about $44,730) payout that required each contributor to fork out just 0.03 yuan (about half a cent).

Internet financial-technology startups in China have disrupted its banking, payments and lending industries, and they are now trying to fill gaps in the country’s health insurance sector.



Last October, billionaire Jack Ma’s Ant Financial Services Group rolled out a “mutual-protection” plan for users of Alipay, its wildly popular payments network, and has so far signed up 50 million participants. The plan provides lump-sum payouts for 100 critical injuries or diseases, including cancerous tumors and some types of paralysis. Ant said this month it is aiming for 300 million participants in the next two years.

“Mutual Aid” in China

Chinese startups are experimenting with crowdsourced medical coverage. Here’s how Ant Financial’s version works.


Who can sign up
Anyone* from 30 days old to 59 years old can be signed up free online
What is covered
Serious illnesses or injuries, which can include malignant tumors, severe Alzheimer's and Ebola
How it gets paid out
Participants receive lump-sum payouts after they are diagnosed; every member contributes a small amount to each payout. The more people sign up, the less each individual has to pay for every claim.

Cases Ant's platform has made 300,000 yuan payouts to
▶ 24-year-old male diagnosed with papillary thyroid cancer
▶ 17-year-old male diagnosed with renal cell carcinoma
▶ 31-year-old male who had a craniotomy
* With no preexisting health conditions or history of large insurance claims Note: 100,000 yuan = $14,910
Source: Ant Financial Services Group
Ant is one of about a dozen private startups in China trying to get more people to sign up for crowdfunded medical coverage for themselves or on behalf of their children and elderly parents. Even Chinese ride-hailing giant Didi Chuxing Technology Co. launched a similar product a few months ago.

The child in Shanghai who underwent brain surgery last November was the first beneficiary of Ant’s Xiang Hu Bao program. The company declined to provide contact details for her family.


Another 18 individuals, as of earlier this month, have since received payouts from Ant’s mutual-aid product, and the contribution of each member has dropped to about 0.01 yuan per claim, paid using Alipay. Ant says it collects an 8% “administrative charge” from each payout.

The fintech companies stress their crowdsourced aid programs aren’t insurance, to avoid running afoul of regulations. Ant initially paired with a licensed Chinese insurer when it first launched its mutual-protection plan, but ended the partnership after Chinese regulators accused the insurer of misleading marketing and disclosure lapses.

The general idea is that small amounts of money can be pooled into large sums. China’s giant population means the cost of coverage can theoretically be spread across hundreds of millions of people at negligible cost to each individual.

When participants file for claims, the companies say they have to verify the information provided before making payouts. That can include interviewing the individuals, reviewing their medical records and contacting the hospitals they have sought treatment from.

Liu Xucheng, a 26-year-old e-commerce professional in Hangzhou, said he signed up for Ant’s mutual-aid product last year. In March, when his newborn daughter was 30 days old, he signed her up for coverage as well.


Mr. Liu and his family members also participate in a similar mutual-protection plan called Shuidi Huzhu. So far, Mr. Liu said, his family has contributed about 50 yuan a year toward other people’s claims on the two platforms.

“Because the cost is low, it’s acceptable,” Mr. Liu said, describing the coverage as basic protection.

More than 90% of China’s population has some form of public health insurance that covers basic drugs and the bulk of hospitalization costs after a deductible is paid. Patients often incur high out-of-pocket costs for imported drugs and costlier medical treatments, and many people can’t afford commercial health insurance.

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“In some sense, it’s a substitute for insurance,” said He Xiaowei, associate professor of insurance and economics at the University of International Business and Economics in Beijing, referring to the mutual-protection plans offered by startups.

He Junlin, a 28-year-old financial professional in the southwest city of Chengdu, joined Ant’s mutual-protection platform last November. So far, he said, he has paid less than 0.1 yuan in total toward other people’s claims during the five months of his membership.


“I’m young. The chance of getting sick is low, so I think having Xiang Hu Bao alone is sufficient,” he said, explaining why he hasn’t purchased commercial health coverage for himself.

Besides the risk of a regulatory clampdown on the burgeoning industry, there is also no guarantee the fintech startups will be around to pay out claims in the long term, especially if they run into financial difficulties themselves.

If the technology startups fail, people will be left without the coverage they thought they had, said Chen Dongmei, an associate professor of insurance at Fudan University in Shanghai. “That’s a huge risk for the consumers,” she added.

“In some sense, it’s a substitute for insurance.”
—He Xiaowei, University of International Business and Economics
Shen Peng, founder and chief executive officer at Shuidi Huzhu—whose name translates into Waterdrop Mutual Help—said the idea behind its platform is that people can “use a small amount of money to cope with big illnesses.” The three-year-old startup’s backers include Chinese internet giants Tencent Holdings Ltd. and Meituan Dianping , and it has more than 78 million members.

Shuidi Huzhu offers different types of mutual-coverage plans, including one that makes payouts for people diagnosed with cancer. The company isn’t profitable yet, according to Mr. Shen, who said the company’s primary goal is to help serve “social interests.”

Mr. Shen said many of its plans’ participants live in smaller cities and don’t have commercial insurance. So far, the platform has paid out more than 400 million yuan in total to more than 3,000 people with critical diseases.

In one case described on its website, Yan Guohua, a 62-year-old farmer in Huai’an, a small city in eastern China, was diagnosed with lung cancer in January. A member of Shuidi Huzhu’s plan for older people, he received a payment of 30,061 yuan this March. During his 380 days of membership, Mr. Yan paid a total of 15.7 yuan. He couldn’t be reached for comment.

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TBH the fact that you're even a mod here fits squarely within Jag's narrative of OK-sanctioned aggression, bullying, and toxicity. *shrug*