The Impact of Health Insurance on Health Outcomes and Spending of the Elderly: Evidence From China’s New Cooperative Medical Scheme

36 Pages Posted: 17 Jun 2013

See all articles by Lingguo Cheng

Lingguo Cheng

Nanjing University

Hong Liu

Central University of Finance and Economics (CUFE)

Ke Shen

Fudan University

Ye Zhang

Nanjing University - School of Business

Yi Zeng

Center for Healthy Aging and Development Studies, National School of Development, Peking University; Center for Study of Aging and Human Development and Geriatric Division, School of Medicine, Duke University

Date Written: December 28, 2012

Abstract

This paper investigates the effects of China’s New Cooperative Medical Scheme (NCMS) on health outcomes and health care expenditure of the elderly in rural China, using panel data from the 2005 and 2008 waves of the Chinese Longitudinal Healthy Longevity Survey. We employ a strategy that combines propensity score matching with a difference-in-differences approach to address selection bias. We show for the first time in the literature that the NCMS has significantly improved the health status of the elderly enrollees. The beneficial health effects of the NCMS can be attributed to more adequate health care utilization among the insured. However, there is no evidence that the NCMS has reduced their out-of-pocket spending. Furthermore, the effects of the NCMS on elderly health are differentiated by socioeconomic status and by gender. In particular, we consistently find that the NCMS has had a significant positive impact on health outcomes for the elderly at the bottom of the income distribution, or in the relatively poor western region, which suggests that the NCMS helps reduce health inequalities among the rural elderly.

Keywords: China, health insurance, health outcome, health spending, the elderly

JEL Classification: I18, D04

Suggested Citation

Cheng, Lingguo and Liu, Hong and Shen, Ke and Zhang, Ye and Zeng, Yi, The Impact of Health Insurance on Health Outcomes and Spending of the Elderly: Evidence From China’s New Cooperative Medical Scheme (December 28, 2012). Available at SSRN: https://ssrn.com/abstract=2280202 or http://dx.doi.org/10.2139/ssrn.2280202

Lingguo Cheng (Contact Author)

Nanjing University ( email )

Nanjing, Jiangsu 210093
China
86-25-83621233 (Phone)

Hong Liu

Central University of Finance and Economics (CUFE) ( email )

Beijing, Beijing
China

Ke Shen

Fudan University ( email )

Beijing West District Baiyun Load 10th
Shanghai, 100045
China

Ye Zhang

Nanjing University - School of Business ( email )

22 Hankou Road
Nanjing, Jiangsu 210093 210093
China

Yi Zeng

Center for Healthy Aging and Development Studies, National School of Development, Peking University ( email )

No.5 Yiheyuan Road
Haidian District
Beijing
China

Center for Study of Aging and Human Development and Geriatric Division, School of Medicine, Duke University

United States

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