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The Impact of Individual Health Account Scheme on Lifetime Income Redistribution: Evidence from China
Author(s) -
Gong Guan,
Wang Hongmei,
Xu Lingli
Publication year - 2015
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12179
Subject(s) - redistribution (election) , economics , redistribution of income and wealth , inequality , demographic economics , china , health insurance , health spending , balance (ability) , exploit , labour economics , macroeconomics , medicine , economic growth , geography , health care , political science , mathematical analysis , mathematics , computer security , archaeology , politics , computer science , law , unemployment , physical medicine and rehabilitation
This paper investigates the effects of a combination of individual health accounts ( IHAs ) and catastrophic insurance on lifetime income redistribution by examining the variations in end‐of‐life IHA balances and lifetime out‐of‐pocket health expenditures. We exploit longitudinal health expenditure data from 2005 to 2007 in K unshan C ity, J iangsu P rovince of C hina. We find a high concentration of low IHA balances at the end of life, with most equal to zero. This finding suggests that most IHA balances are used for health expenditures and that the income redistribution effect through the accumulation of IHA balance is limited. However, the results also show a wide variation in lifetime out‐of‐pocket spending in the form of deductibles and coinsurance, which implies serious inequality in individual financial burden that can lead to a large income redistribution effect.