In order to promote social welfare, the State shall establish a social insurance program, and to improve national health the State shall develop extensive services for sanitation and health care and a system of public medical service. These are explicitly provided in Articles 155 and 157 of the Constitution. Furthermore, Article 10 of the Amendments to the Constitution requires in Paragraphs 5 and 8 thereof that the State shall promote the national health insurance and pay special attention to social welfare activities such as social relief and aid, welfare services, social insurance, and medical and health care. The duty of the State to promote the national health insurance rests on governments at both the central and the local levels. It is also set forth in the Constitution that each local self-governing body shall assume the duty to carry out activities in connection with sanitation, charity and public welfare for the purpose of taking care of the livelihood of the people residing within its respective administration region, and that such activities may be partly carried out through the implementation of the national health insurance program. The National Health Insurance Act promulgated on August 9, 1994, and coming into force as of March 1, 1995, is a statute enacted and executed by the central government. All administrative expenditure arising out of and in connection with the implementation of the national health insurance program must therefore be borne by the central government. However, the insurance premium at issue here, which each local self-governing body is bound to subsidize under Article 27 of the Act, is a payment made by the insured subjects as a consideration for obtaining protection rather than cost and expenses for the implementation of the national health insurance program. It is thus consistent with the purpose contemplated by the constitutional provision cited above that each local government makes a contribution to part of the subsidy for such premium in addition to the portion borne by employers and subsidized by the central government.

　　While local self-governing bodies are protected by the constitutional system, and the availability of funds required for their administration is a matter within the scope of their self-governing financial power subject to the principle of legal reservation, the Constitution does not forbid the central government from requiring under law that local governments, which have the duty to act in concert in matters relating to the national health insurance program, share the subsidy for the premium insofar as such requirement is necessary for the overall administration of the State and to the extent that the core realm of their self-governing power is not encroached upon. The Constitution is silent in respect of the sharing of financial responsibility for matters undertaken by the central and local governments. While it is provided in the Act Governing the Allocation of Government Revenues and Expenditures, Article 37, Paragraph 1, Subparagraph 1, that expenditure of governments at all levels for matters implemented by the central government under laws enacted thereby shall be borne by the central government, the provision is not intended to mean only expenditure for administration matters, and we see no reason to preclude the making of special law so long as it meets the foregoing conditions. With this concept in mind, we hold that Article 27 of the National Health Insurance Act comes under such a special law. As regards the ratio of subsidy specified in said article to be allotted to different classes of insured persons for their premium payment, it is a matter within the scope of legislative discretion and gives rise to no question of constitutionality unless such ratio is clearly inappropriate and unreasonable.

　　Where local self-governing bodies are required to share the cost for the implementation of any law such as the provision in respect of the ratio of subsidy for the premium at issue as set forth under the National Health Insurance Act, Article 27, Subparagraph 1, Items 1 and 2, and Subparagraphs 2, 3 and 5, they must be given sufficient opportunity of participation in the course of formulation of the law. For this purpose, the competent administrative agency must discuss and consult with local governments when drafting such law to avoid possible unreasonable outcome, which may result from arbitrary decisions, and must work out sound preplanning of the financial resources required for the implementation of the law. Likewise, the legislature, in revising relevant laws, must allow representatives of local governments the opportunities to be present as observers during the legislative process and to express their opinions.

　　In order to promote social welfare, the State shall establish a social insurance program, and to improve national health the State shall develop extensive services for sanitation and health care and a system of public medical service. Furthermore, the State shall promote the national health insurance and pay special attention to social welfare activities such as social relief and aid, welfare services, people's employment, social insurance, and medical and health care. Expenditure for relief activities such as social relief and aid and people's employment must be given priority when preparing the national budget. These are the fundamental policies of the State explicitly laid down in Articles 155 and 157 of the Constitution and Article 10, Paragraphs 5 and 8, of the Amendments to the Constitution. While the term "State" is used in the text of a number of articles in the Constitution, whether it should be interpreted to refer solely to the central government or to include both central and local governments depends on the nature of the matter prescribed by the particular provision, and should not be generalized. The constitutional provisions relating to the fundamental policies of the State are intended to be guiding principles directed at the formulation of national policies and overall development of the nation, and must thus operate to regulate not only the central level of the government. Article 155 of the Constitution requiring that the State establish a social insurance program to promote social welfare is designed to make the implementation of a social insurance program a primary means whereby the goals of social welfare may be achieved. And social welfare activities reflect the duty of the State to take care of its people by offering them a decent life. This duty must be undertaken not only by the central government but also in concert by local self-governing bodies, which are even more closely related to the lives of the people residing in their respective regions (See the Local Government Systems Act, Article 18, Subparagraph 3, Item 3) and should not be considered free of any duty to work with the central government in concerted efforts to make the fundamental policies relating to social security a reality. It follows therefore that the duty of the State to put forward a national health insurance program rests on both the central and the local governments. The National Health Insurance Act promulgated on August 9, 1994, and coming into force as of March 1, 1995, is a statute enacted and executed by the central government. Under Article 68 of the Act which provides that all costs and expenses for facilities, equipment and working funds (including personnel costs and management expenses) necessary for the national health insurance program shall be paid by the central government; thus, the administrative expenditure arising out of and in connection with the implementation of the national health insurance program must therefore be borne by the central government. However, it is provided by the Constitution in Article 109, Paragraph 1, Subparagraphs 1 and 11, and Article 110, Paragraph 1, Subparagraphs 1 and 10, that local self-governing bodies shall have the duty to carry out activities in connection with sanitation, charity and public welfare for the purpose of taking care of the livelihood of the people residing within their respective administration regions. While such duty may be partly fulfilled through the implementation of the national health insurance program, it is not discharged by the implementation of the program. The insurance premium at issue here, which each local self-governing body is bound to subsidize at a specified rate under Article 27 of the Act, is a payment made by the insured subjects as a consideration for obtaining protection and as the financial resources for insurance payment rather than cost and expenses for the implementation of the national health insurance program. It is thus consistent with the purpose contemplated by the constitutional provisions cited above that all local governments join with the central government in establishing a social security system by subsidizing a part of the premium in addition to the portion borne by employers and subsidized by the central government. This was also what we had in mind in deciding our Interpretation No. 279 in which we held that the subsidy granted by a provincial or municipal government as a contribution to the premium for labor insurance constituted the performance of such government's duty in respect to workers’ welfare.

　　While local self-governing bodies are protected by the constitutional system, and the availability of funds required for their administration is a matter within the scope of their self-governing financial power subject to the principle of legal reservation, the Constitution does not forbid the central government from requiring under law that local governments share the subsidy to the premium insofar as such requirement is necessary for the overall administration of the State and to the extent that the core realm of their self-governing power is not encroached upon. By "encroachment upon the core realm" we mean jeopardy to the essence of the autonomous power of local self-governing bodies to such an extent that the protection guarding the system of local self-governing bodies becomes fictional. This includes preparation of budgets by the central government for and on behalf of local governments and the requirement that local governments share expenses for matters totally unrelated with the duty and functions of local governments such as foreign affairs and national defense. Where local self-governing bodies are required by law to assume the duty to lend concerted efforts in the division of powers or to share expenditure for matters related with the essence of self-government, we do not believe the core realm of their self-governing financial powers is being jeopardized. The Constitution is silent in respect of the sharing of financial responsibility for matters undertaken by the central and local governments. While it is provided in the Act Governing the Allocation of Government Revenues and Expenditures, Article 37, Paragraph 1, Subparagraph 1, that expenditure of governments at all levels for matters implemented by the central government under laws enacted thereby shall be borne by the central government, the provision is not intended to mean only expenditure for administration matters. For this purpose, special provisions may be made in order to define the sharing of financial responsibilities so long as the law meets the foregoing conditions, more so in view of the provision of the Act in Schedule 2-III whereby "subsidy and expenditure for social insurance, social relief and aid, social welfare, people's employment, medical and health care, and other activities" are listed under category 10 "social welfare expenditure of municipalities under direct jurisdiction of the Executive Yuan." Undoubtedly, the issue here with respect to Article 27 of the National Health Insurance Act has to do with such special legislation, and the items of expenditure in question come under the category specified in Schedule 2 of the Act Governing the Allocation of Government Revenues and Expenditures. As regards the ratio of subsidy specified in said article to be allotted to different classes of the insured for their premium payment, it is a matter within the scope of legislative discretion and gives rise to no question of constitutionality unless such ratio is clearly inappropriate and unreasonable.

　　Where local self-governing bodies are required to share the cost and expenses for the implementation of any law such as the provision in respect of the ratio of subsidy for the premium at issue as set forth under the National Health Insurance Act, Article 27, Subparagraph 1, Items 1 and 2, and Subparagraphs 2, 3 and 5, they must be given sufficient opportunity for participation in the course of formulation of the law in order to preserve the self-responsible mechanism of local self governing bodies. For this purpose, the competent administrative agency, when drafting such law, must discuss and consult with local governments and allow them reasonable opportunity of participation in light of the possible impact of the law on their financial conditions, so as to avoid possible unreasonable outcomes, which may result from arbitrary decisions, and must work out sound preplanning of the financial resources required for the implementation of the law under Article 38-1 of the Act Governing the Allocation of Government Revenues and Expenditures. Likewise, the legislature, in revising relevant laws, must allow representatives of local governments the opportunities to be present as observers during the legislative process and to express their opinions.