Can decreased cost-sharing reduce the vulnerability of sick families to poverty? An analysis of the multi-level social health insurance scheme in China

Abstract

In recent years, China has been increasing social health insurance benefits to alleviate poverty due to illness. In 2015, China introduced the Critical Illness Insurance for patients with high out-of-pocket expenses as supplementary to the social health insurance, which categorised patients with different medical expenses into different cost-sharing policies. We conducted a survey on households with high-cost patients in rural Shandong in 2019 and employed the instrumental variables estimation approach to determine how different cost-sharing measures affect households’ poverty vulnerability. We found that cost-sharing reduction significantly decreases the vulnerability of sick families to poverty. Moreover, we found that the positive effect is attributed to a reduction in health burden and household livelihood capital shocks. The vulnerability to poverty is still exceptionally high owing to the heavy health burden in rural China and other developing countries. The results of our study provide insights into poverty alleviation by improving social health insurance in developing economies.

Medical insurance, vulnerability to poverty, and wealth inequality

“…Further studies show that participation in medical insurance can stabilize household income (10) and enhance social welfare (14). More importantly, such participation can reduce the likelihood of households falling into poverty due to health risk shocks (1,(15)(16)(17) and the income gap between urban and rural residents (18). Korenman et al (19) developed a healthinclusive poverty measure and found that participation in medical insurance reduced the poverty rate by 2.9 percentage points among people under 65 in Massachusetts and by 3.2 percentage points among children.…”

Relationship between the health poverty vulnerability and multimorbidity patterns identified with latent class analysis aged 45 years or more adults in Northwestern China: A cross-section study

“…The possibility of disease-induced poverty exists [ 17 ] in China and globally. [ 18 ] According to the office of China’s Poverty Alleviation, 42% of registered poor households lapsed into poverty because of illness in 2017, indicating that disease is a primary cause of rural poverty. [ 19 ] Yang Zhou [ 20 ] showed that 56.3% of poverty was caused by illness among household members, and over 3-fifths of households had at least 1 patient; chronic diseases have long been the largest health challenge for poor rural adults in China.…”