NEARLY two-thirds of Chinese people don't have medical insurance, said a blue paper issued by the Chinese Academy of Social Sciences in December 2005, Xinhua news agency reported today.

The blue paper also said about one in four of the interviewees gave up medical treatment because they cannot afford the cost.

Forty percent of urban residents and 72 percent of rural people have to pay their own medical expenses, it said.

Only about 133.41 million Chinese were covered by the public-funded medical insurance by September, the blue paper said. The government has spent 5.03 billion yuan (US$622 million) on the scheme to subsidize farmers who have made 119 million medical-expense claims, which translates into 42.34 yuan for each claim.

The paper said market-oriented medical reform has resulted in a decrease of medical service quality in rural areas, which is an emerging challenge to China.

The growing pricing power of hospitals has also led to the soaring trend of medical bills, it said.