Social health insurance consolidation and urban-rural inequality in utilization and financial risk protection in China

Abstract

Universal health care is a long-term policy goal for health care reform in China. In 2016, China consolidated its urban and rural resident social health insurance programs into one program with a goal to reduce disparities between rural and urban populations. Using a nationally-representative sample of 14,967 individuals from the China Family Panel Studies surveys (2012-2018), we investigate whether the consolidation reduced gaps in total and out-of-pocket medical expenditure, and reimbursement between rural and urban residents. Our identification approach relies on an augmented difference-in-differences analysis whereby we compare the two programs that were consolidated to a different program that was not consolidated, before and after the consolidation. We find no evidence that the urban-rural gaps in these measures have narrowed as a result of the consolidation, at least in the near term. This surprising result may be partly explained by urban-rural inequality in access to care and provincial fiscal spending on health care. While these findings need to be confirmed with additional data and research, we call for continued efforts on addressing supply-side challenges, particularly in under-served areas.