The State Council, China's Cabinet, recently announced that medical insurance will be extended to cover all the major illnesses for all urban and rural residents by the end of the year. This has been widely welcomed by the public.

This is the latest move to reform the country's healthcare system. The authorities said 50 percent of the medical costs for critical illnesses will be covered by the insurance, and the percentage will gradually increase as the financing and management of the medical insurance system further improve.

Under the medical insurance system at present, people have to pay a huge amount of money if they suffer a major illness, because only a small part of medical costs are covered by the existing medical insurance and many drugs for treating major illnesses are not included in the list of basic drugs. As a result, many families have fallen into poverty when one of their members suffered a serious illness, especially families in rural areas.

Although the government has spent 3 trillion yuan ($480 billion) on healthcare reform, the system still struggles with problems, such as a shortage of doctors and frequent conflicts between medical staff and patients. China's healthcare system requires further reforms to meet people's needs.