The decision by the Chinese government to allow all couples to have two children may have implications for the country's healthcare system, ranging from making sure there are enough pediatric facilities to potential increases in insurance costs, observers said.

China's family planning policy was introduced in 1979 to slow the nation's population growth rate. The central government last week announced the end of the policy, but on Monday China's top family planning authority said the one-child policy remains in effect until March when a final plan for the change will be ratified by the annual session of China's top legislature. The policy change follows declining birth rates and changing demographics that were reducing the working population.

Yanzhong Huang, senior fellow for global health at the Council of Foreign Relations in New York, said that eventually the change may be good for China's healthcare system. 

"It will help reverse rapid population aging in China, and therefore also reduce China's burden of non-communicable diseases (NCDs)," Huang said. "We know that population aging in China is associated with the increase in the number of people suffering NCDs (about 50 percent of the NCDs occur among people over 65). As a result, less money will be spent on healthcare as research shows that per capita healthcare spending for elderly people is 3-4 times of the young people."

Joan Kaufman, director of the Columbia Global Centers East Asia at Columbia University in New York, said with every Chinese citizen, urban and rural, allowed to have a second (child), we may see more pent-up demand and this may strain the lower level hospital system – both MCH (maternity and child) hospital and provincial/county hospitals.  And obviously once the child is born there will be more use of pediatric health care for the child, covered by insurance. "So it's possible that insurance costs will also rise due to more deliveries and more kids," said Kaufman, who has been a lecturer in global health and social medicine at Harvard University's Medical School.

In 2004, 16.87 million babies were born in China, according to the National Bureau of Statistics. So even if just a small percentage of women in China decide to have a second child that could possibly mean more than 1 million additional births a year. Huang said the policy change will lead to a higher total fertility rate, and could potentially burden the country's healthcare system, especially neo-natal care facilities.

Qian Xu, professor and chair of the department of maternal and child health in the school of public health at Fudan University in Shanghai, said more health resources such as midwives, obstetricians and pediatricians are needed in response to the policy change. "Obstetric, neonatal and pediatric care should be strengthened and expanded at all levels. Relevant health insurance should be either developed or modified for better coverage and benefits," Xu said.

Kaufman believes that the new policy will result in urban and rural women having an additional child. "The policy doesn't distinguish but many rural residents already have two, so we might not see a major surge in new births. Cadres and professionals, more than farmers, have followed the one-child policy," she said.