Fighting Inequalities: Impact of Urban-Rural Health Insurance Integration in Rural China

Integrating social health insurance, which helps unify the administration, policies, and funds of various health insurance programs, is expected to combat health inequalities. This paper provides the first micro-level evidence from China on the impact of health insurance integration on health care. We exploit the China Health and Retirement Longitudinal Study (CHARLS) dataset and combine it with original city-level data on social health insurance policy. We employ difference-in-difference models with matching to estimate the effects of integrating the Urban Resident Basic Medical Insurance (URBMI) and the New Rural Cooperative Medical Insurance (NRCMI) on individuals’ health care utilization (including inpatient and outpatient care) and health outcomes. We find that the health insurance integration has significantly increased inpatient and outpatient care utilization. Moreover, we provide evidence of a possible mechanism that drives this relationship: the inpatient reimbursement rate significantly increased after the integration. We further find that after the integration, people traveled longer distances to seek inpatient and outpatient care, and their health, as measured by self-assessed health status, has improved. Nonetheless, these results are found in the rural sample only, and we observe no significant impact of the health insurance integration on total hospital charges or patients’ out-of-pocket payments.Peer reviewe