Healthcare Care & Insurance in China: What We Learned from CHARLS 2008

1. Healthcare Care & Insurance in China: What We Learned from CHARLS 2008 John Strauss Hao Hong Lin Li Albert Park Li Yang Yaohui Zhao

2. Goal of the Paper • Describe the state of health insurance and heath care utilization as of 2008 • Micro data allows more precise description • Who has it • What types • Who uses outpatient and inpatient services • Key parameters (premiums, out-of-pocket costs)

3. Data Source • China Health and Retirement Longitudinal Study (CHARLS) 2008 in Zhejiang and Gansu provinces • Module D – health care and insurance • Health insurance • Health service utilizations • We use information on people 45 and older • Descriptive tables are weighted

4. INSURANCE COVERAGE

5. Most people are covered by some type of health insurance. Five years ago very few would have been covered, especially in rural areas. Coverage declines a little for the oldest cohort. No big difference between men and women.

6. NCMS is the largest form of insurance. Followed by urban employee medical insurance. Urban resident medical insurance is the least significant.

7. Regression Analysis for Having Any Insurance • Age and education • Adding income (logPCE), nonlinear • Adding migrant status, marital status and rural dummy • Adding interactions of rural and province dummies • Adding community fixed effects • All linear probability models

8. Higher education positively related to having insurance; Higher income positively related to having insurance; Widowed men much less likely to be insured; Migrants much less likely to be insured, by 15% points

9. Higher education positively related to having insurance; Widowed women much less likely to be insured; Migrants much less likely to be insured; As for men, Rural Gansu MORE likely to be insured. Local community factors matter a lot

10. INSURANCE TYPES

11. Urban hukou: urban employee insurance is the largest type of insurance Rural hukou: NCMS is the dominant insurance Urban area: a lot of residents with rural hukou

12. Similar patterns as men

13. NCMS is not associated with education or incomes; Widowed men much less likely to be insured; Migrants much less likely to be insured; Rural Gansu MORE likely to be insured. Local community factors matter

14. NCMS is associated with literacy but not incomes; Migrants much less likely to be insured; Rural Gansu MORE likely to be insured.

15. SERVICE UTILIZATION

16. Women use outpatient care more frequently.

17. Outpatient service for men is associated with education and to a lesser degree incomes; Rural Gansu more likely to use outpatient care.

18. Outpatient service for women is strongly associated with incomes; Rural Gansu more likely to use outpatient care. Local community factors matter

19. Relatively few people used inpatient care; Not much difference between men and women.

20. Inpatient service for men is strongly associated with incomes; Urban Gansu more likely to use inpatient care.

21. Inpatient service for women is strongly associated with incomes; Gansu more likely to use inpatient care.

22. KEY PARAMETERS OF INSURANCE

23. Insurance premiums are very low in rural areas of Zhejiang and Gansu- 20-30 yuan per year compared to average rural annual expenditures of 3,800-7,500 RMB; In urban areas, premiums are higher, but still affordable compared to annual expenditures of 7,500-10,000 yuan In Zhejiang about 1 in 5 elderly persons don’t have to pay any premium; premiums are also lower than Gansu.

24. Inpatient Out of Pocket Shares: By Residence OOP cost shares are much lower in urban areas than in rural areas, reflecting the much higher insurance premiums in urban areas. OOP cost shares are much lower in Zhejiang than in Gansu.

25. Inpatient Out of Pocket Share: By Hukou The urban-rural contrast is sharper if we use the hukou distinction, especially in Zhejiang province.

26. OOP shares are much higher for outpatient care than inpatient care; Reimbursement rates are higher in urban than in rural areas; Reimbursement rates are higher in Zhejiang than in Gansu.

27. Among rural hukou holders, outpatient reimbursement rates are very low; this reflects the design of NCMS Urban Zhejiang has the highest reimbursement rate for outpatient care.

28. Out-of-pocket shares are strongly associated with locations. No SES gradient is observed.

29. OOP shares are strongly associated with locations. No SES gradient is observed.

30. Summary: Descriptive • China achieved almost universal insurance coverage in about 6 years • Reimbursement rates are much lower than in industrial countries, but much higher than they have been recently in China • The new urban and rural insurance is mostly designed to reimburse inpatient care expenses • Recent improvements have included coverage of chronic illnesses

31. Summary: SES Correlations • Insurance coverage has some SES correlations even within communities • Utilization of health services has strong SES correlations • But not much SES correlation with reimbursement rates, which is arguably a sign that rules apply to everyone regardless of SES • Important community differences exist in almost all aspects, even within provinces