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Abstract
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.