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Welfare consequences of access to health insurance for rural households: Evidence from the New Cooperative Medical Scheme in China
Author(s) -
Sun Jessica Ya
Publication year - 2020
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3985
Subject(s) - generosity , business , welfare , china , moral hazard , government (linguistics) , public economics , renminbi , population , economic growth , actuarial science , economics , environmental health , finance , geography , incentive , medicine , political science , linguistics , philosophy , archaeology , exchange rate , microeconomics , law , market economy
This study evaluates the welfare benefits of the New Cooperative Medical Scheme (NCMS), the main public health insurance plan for the rural population in China. The findings show that the value of the NCMS to recipients is slightly lower than the government's costs of implementation, ranging from 0.79 to 0.97 per RMB of the resource cost of the NCMS. The estimated moral hazard costs are low compared with the total benefits. It is also estimated that the benefits originating from the NCMS's insurance function only constitute 20% of the total benefits, suggesting a need for higher generosity levels among rural households. Our results shed new light on the welfare effects of access health insurance among low‐ and middle‐income households.