Effect of Major Illness Insurance on Vulnerability to Poverty: Evidence From China

Abstract

Disease is the primary cause of poverty in China. Health insurance is an essential mechanism for managing health risks and addressing the risk of financial loss. Using data from the China Family Panel Studies (CFPS) waves from 2010 to 2016, this study develops a random forest method to assess households' vulnerability to poverty and then examines the impact of major illness insurance on vulnerability to poverty by focusing on the rollout period of a major illness insurance scheme. The research also examines the impact of increased major illness insurance coverage on poverty reduction by focusing on the change from low- to high-coverage health insurance. The findings indicate that major illness insurance and improvements in the degree of coverage significantly reduce vulnerability to poverty. In addition, major illness insurance is found to alleviate the vicious cycle of poverty and disease through the mechanism of increasing household income, and its effect has strengthened over time. Compared to other poverty reduction policies, major illness insurance has a greater influence on poverty alleviation.

Perspectives and evaluation on the effect of financial burden relief of medical insurance for people with catastrophic diseases and its influencing factors

“…We drew on the independent variables addressed in previous relevant studies ( 10 , 18 , 30 , 33 ) and further consulted with medical insurance experts to avoid omitting important variables. The main independent variables of this paper: (1) existing design problems of the medical insurance scheme that may influence the alleviation effect (including medical insurance reimbursement standards for patients, regional and population differences in benefit package of medical insurance due to the different levels of economic development, etc.…”

“…A national survey shows that the percentage of Malaysian households suffering from CHE is 2.8% and increasing ( 8 ). In China, disease is the main cause of people’s poverty ( 9 , 10 ). According to the statistical bulletin released by China’s National Bureau of Statistics, among the causes of poverty in rural China, poverty caused by disease accounts for 44.1%, involving nearly 20 million people, including 7.34 million people suffering from catastrophic and chronic diseases ( 11 ).…”

Healthcare Expenditures among the Elderly in China: The Role of Catastrophic Medical Insurance

“…By simulating various CMI compensation schemes, some studies compared the effects of CMI under various catastrophic health expenditure measurement methods and compensation schemes [ 15 , 16 , 17 , 18 , 19 ]. By examining the effectiveness of CMI implementation using datasets from health insurance information systems and survey data at some regional or national levels, some studies discovered that increased CMI coverage significantly effectively alleviated poverty caused by illness [ 20 ], and reduced vulnerability to poverty and broke the vicious cycle of poverty and disease through increased income [ 21 ].…”

Assessment of the effects of targeted poverty alleviation policy on differently poverty‐stricken households: A multi‐propensity score weighting model

“…Specifically, China sought to classify poverty‐stricken households based on their environments and the reasons for their poverty so that the assistance could be based on need (Cheng et al, 2021). There were six main reasons identified for China's poverty: illness (Zheng & Peng, 2021), disability (Braithwaite & Mont, 2009), poor education (Ladd, 2012), lack of labor (Bandiera et al, 2017), lack of technology (Gollakota et al, 2012), and lack of funds (Tshitangoni et al, 2010). Therefore, to fully examine China's diverse poverty governance, this study explored the poverty reduction effects and precision of the TPA policy on these six poverty‐stricken household groups, which have not been paid attention to in previous studies.…”