Yaung surprised the government and the public Monday by tendering his resignation because he felt unable to limit insurance premium hikes as much as Premier Wu Den-yih had asked.

In a statement and in media interviews yesterday, Yaung said policies had been hijacked by elections, making tough measures needed to reform insurance impossible.

"Each time there is an election, policies stop advancing," he said, adding this was not beneficial to the country's long-term development. "There should be a referendum on holding elections only once every two years at the most."

President Ma Ying-jeou approved of combining more elections, such as the votes for county magistrates, city mayors and councilors in 2014, the Presidential Office said in a reaction.

Ma and Wu urged Yaung to withdraw his resignation yesterday in order to continue the reforms.

At the heart of the minister's resignation were two different proposals for raising insurance premiums.

Wu wanted hikes to be limited to the wealthiest 25 percent of the population, but Yaung said it was only possible for him to restrict increases to 41 percent of the public, leaving premiums unchanged for only 59 percent instead of the 75 percent requested by the premier. The minister has been a staunch advocate of premium hikes to do away with the system's NT$58.8 billion debt, while top politicians feel the rises will have negative electoral consequences.

Yaung said his plan would result in an extra NT$45 billion for the system, allowing for a major step forward to doing away with its debt over the next few years.

After announcing his resignation at a news conference, Yaung asked for leave and failed to turn up at the Executive Yuan for a report asked by Wu Monday evening and for questioning by lawmakers yesterday morning. The premier meanwhile returned his letter of resignation.

Reporters catching Yaung leaving his home yesterday morning called him "minister," but he replied "former minister." He reportedly submitted a second resignation letter and recommended his predecessor, presidential confidant Yeh Ching-chuan, for the job. Yaung said he wanted to retire, but media reports said the KMT was thinking of having him run in Tainan in the year-end elections.

Wu praised Yaung to lawmakers and reporters alike, expressing the hope that he would not leave the Cabinet over the premium issue. "The two versions of the premium proposal can be reconciled by more communication," the premier said.

The minister's two deputies and the director of the Bureau of National Health Insurance also tendered their resignations, following administrative practice, but Wu said he also wanted them to stay on.

The premier said there would be a clear plan by March 17 with definitely a final decision before the end of the month.

Wu said the government's aim was still the eventual introduction of a second-generation health insurance system, where the premium would be calculated on total household income including stock market profits.

The premier rejected a plan mentioned by the media to raise premiums for everyone making at least NT$24,000 a month. He said the plan was the first proposal from the DOH, but had not been approved by the Cabinet because it went too far in the present economic climate.

President Ma's spokesman said he backed Wu's efforts to keep Yaung in the Cabinet and to push for health insurance reforms. The Presidential Office refuted claims that Ma's support for the premier's version at a meeting Monday had been the final straw in pushing Yaung to resign. KMT lawmakers said they supported the Cabinet version, where only people making more than NT$50,000 a month would see increases, but added Wu should persuade Yaung to withdraw his resignation.

The opposition Democratic Progressive Party said Yaung's predicament showed that the KMT had no consistent policy and lacked the backbone to take difficult decisions. The minister's departure was entirely predictable under the circumstances, the DPP said.

The opposition party has insisted local governments pay arrears to the system, including a reported NT$40 billion for Taipei City and NT$20 billion for Kaohsiung City.