The Impact of National Health Insurance on Birth Outcomes: A Natural Experiment in Taiwan

Abstract

We estimate the impacts of the introduction of National Health Insurance (NHI) in Taiwan in March 1995 on the health of infants. Prior to NHI, government workers (the control group) possessed health insurance policies with comprehensive coverage for births and infant medical care services. Private sector industrial workers and farmers (the treatment groups) lacked this coverage. All households received coverage for the services just mentioned as of March 1995. Since stringent requirements for reporting births introduced in 1994 produced artificial upward trends in early infant deaths, we focus on postneonatal mortality (deaths from the 28th through the 364th day of life per thousand survivors of the first 27 days of life). We find that the introduction of NHI led to reductions in this rate for infants born in farm households but not for infants born in private sector households. For the former group, the rate fell by 0.5 deaths per thousand survivors or by 13 percent relative to the mean in the pre-NHI period of 4 deaths per thousand survivors. An especially large decline of 6 deaths per thousand survivors occurred for pre-term infants-- a 36 percent drop relative to the pre-NHI mean of 17 deaths per thousand survivors.