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A new medical insurance plan to be introduced on September 1 is expected to benefit 700,000 young people aged under 18 in Shenzhen, South China's Guangdong Province.

As well as those with a hukou, a registered permanent residence, children of migrant laborers from other countries and regions, including Hong Kong, Macao and Taiwan, will benefit from the scheme, the Shenzhen management bureau on social insurance funds said at a press conference yesterday.

The plan was passed by the Shenzhen government on Thursday. A draft was drawn up early last year after four years of information gathering and research, the management bureau said.

Yuan Jianyong, director of the bureau, said: "With the launch of this plan, the government hopes to prevent families from falling into debt when their children become sick, or having to cancel medical treatment because of financial difficulties."

He said that after more than a year's consultation and revisions, the government fiscal subsidy for the project was increased from 30 yuan ($4) to 75 yuan per person per year, which is the highest of any equivalent scheme across the country.

Yuan said that parents are required to pay 75 yuan a year to the fund, but in the case of poor families, this is covered by the civil affairs department.

With the exception of certain serious diseases and conditions, including leukemia, hemophilia, aplastic anemia, cancer and organ transplants, the fund can be used only to cover inpatient costs.

It covers 80 percent of medical bills of less than 5,000 yuan ($655), 85 percent of those between 5,000 and 10,000 yuan and 90 percent of those over 10,000 yuan, Yuan said. A person can claim a maximum of 200,000 yuan for medical treatment per year.

For migrant workers, at least one parent must have been in the city's social insurance program for at least a year and the child must attend kindergarten or school. Similar conditions will apply to foreigners and people from Hong Kong, Macao and Taiwan, Yuan said.

The province's first medical insurance plan for young people was introduced on September 1, 2006 in Zhuhai. There the government pays 30 yuan per person per year and families have to pay 90 yuan.

It also allows people to claim up to 200,000 yuan a year, although the average claim rate is only 65 percent of that.

Similar funds in Beijing and Shanghai provide a maximum of 80,000 yuan and 100,000 yuan, respectively.

However, some parents in Shenzhen are not satisfied.

"Children are quite healthy once they reach school age. And even when they are sick they seldom need to stay in hospital. People are more concerned about outpatient costs, but they have been excluded from the plan," Huang Yifei, a 35-year-old accountant, said.