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Almost 1.4 million non-working residents in Shanghai have joined the newly extended basic medical insurance scheme, officials said Thursday.

Children, students and the elderly were the latest additions to the scheme, as Shanghai became the first city in the country to expand its healthcare coverage to all of its permanent residents.

About 2.7 million non-working residents are entitled to join the extended scheme, 1.38 million of whom have so far done so, the Shanghai medical insurance bureau said.

The city's healthcare scheme, launched on Jan 1, initially offered cover to 7.4 million working urban residents and some 2 million rural residents.

Rising medical costs are a major concern for many city residents, so the extension of the scheme has been warmly received.

Zhao Husheng, a 47-year-old resident who makes his living selling snacks on the street, is one of those covered by the extended healthcare scheme.

"I wouldn't be able to afford the expensive medical fees without the government's subsidy because I am not covered by an employment scheme," he said.

Under the new scheme, Zhao will pay a premium of 480 yuan a year, with any additional fees being paid by the government.

Both central and local governments will contribute to the subsidized scheme, which sets different premium rates for adults and children, and according to people's incomes.

Children under 18, for example, pay just 60 yuan a year, while those aged over 70 pay 240 yuan.

China introduced a health insurance program for urban employees in 1998. By the end of last year it covered almost 170 million people.

In 2003, a cooperative medicare program was launched for people living in rural areas.

It now encompasses at least 700 million of the country's 800 million people living in the countryside.