The Department of Health's proposed amendments to Taiwan's National Health Insurance (NHI) Act, focusing on the so-called second generation premium system, were lambasted by legislators for good reasons: the policy makers did not fully understand the principles of fairness and efficacy. While the amendments seek to make the premium-payment scale fairer for all citizens, the proposal for calculating the premium based on a household's total income was seen as potentially leading to even greater unfairness. Little wonder it has been roundly criticized, even by the ruling party's lawmakers. The government might have thought that it would be fair for higher income earners to shoulder a proportionally greater share of the NHI's financial burden. A more reasonable formula to look at this, according to academics, is to design the premium paying scheme based on the total tax and fees paid to the government so that the national income would be more evenly distributed among all citizens after health insurance premiums have been collected. One way to achieve fairer income distribution is what the opposition party has proposed, and the government is considering: collect NHI premium from people paying stock and land transaction taxes. Such premium would go a long way to filling in the financial shortages in the NHI program. Squeezing some money from stock and land transactions would not increase the government's administrative cost. In contrast, the household income method is both complicated and inefficient, increasing administrative cost to boot. The government should give some serious thought to why its proposal on second- generation NHI reform has been regarded as both unfair and inefficient and make necessary adjustments before putting forward a new set of amendments to the legislature. (Editorial abstract -- Dec. 12, 2010) enditem/cs nnnn 