The impact of tax-subsidized health insurance on health and out-of-pocket burden in China

Feiyan Yang () and Li Wei
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Feiyan Yang: Southwestern University of Finance and Economics
Li Wei: Renmin University of China

The Geneva Papers on Risk and Insurance - Issues and Practice, 2023, vol. 48, issue 1, No 9, 194-246

Abstract: Abstract To achieve a tiered healthcare system in China, the government has beefed up efforts to encourage people to embrace private health insurance. One of the steps is to introduce tax-subsidized health insurance (TSHI) in 2015. This paper assesses whether TSHI is successful in improving health and easing financial burden. Using unique data from the Domestic TSHI Consumers Evaluation Survey in 2019 and Propensity Score Matching method, we find that TSHI has been effective in improving participants’ health status, but not in lowering out-of-pocket (OOP) burden. Besides, TSHI can increase the utilization of both inpatient and outpatient care, which provides a possible explanation for beneficial health effect. From an internal perspective, TSHI has the potential to reduce disparities in health and access to healthcare services. Our results provide implications on modifying the benefit design of TSHI to better complement basic medical insurance system and on reforming the current tax incentive policy to reach out a large number of low-income people.

Keywords: Tax-subsidized health insurance; Health outcome; Out-of-pocket burden; Healthcare utilization (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41288-022-00276-4

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