Does health insurance matter? Evidence from China’s urban resident basic medical insurance

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides an opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of low-income adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group.

In 2003, China launched a heavily subsidized voluntary health insurance program for rural residents. We combine differences-in-differences with matching methods to obtain impact estimates, using data collected from program administrators, health facilities and households. The scheme has increased outpatient and inpatient utilization, and has reduced the cost of deliveries. But it has not reduced out-of-pocket expenses per outpatient visit or inpatient spell. Out-of-pocket payments overall have not been reduced. We find heterogeneity across income groups and implementing counties. The program has increased ownership of expensive equipment among central township health centers but has had no impact on cost per case.

This paper explores the impact of the New Cooperative Medical Scheme (NCMS), a newly adopted public health insurance program in rural China. Using a longitudinal sample drawn from the China Health and Nutrition Survey (CHNS), we employed multiple estimation strategies (individual fixed-effect models, instrumental variable estimation, and difference-in-differences estimation with propensity score matching) to correct the potential selection bias. We find that participating in the NCMS significantly decreases the use of traditional Chinese folk doctors and increases the utilization of preventive care, particularly general physical examinations. However, we do not find that the NCMS decreases out-of-pocket expenditure nor do we find that it increases utilization of formal medical service or improves health status, as measured by self-reported health status and by sickness or injury in the past four weeks. Our study indicates that despite the wide expansion of coverage, the impact of the NCMS is still limited.