Welfare consequences of access to health insurance for rural households: Evidence from the New Cooperative Medical Scheme in China

• Main Author: SUN, Jessica Ya
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: China; health insurance; New Cooperative Medical Scheme; welfare analysis; Asian Studies; Health Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/2477; https://ink.library.smu.edu.sg/context/soe_research/article/3476/viewcontent/Welfare_Consequences_of_Access_to_Health_Insurance_for_Low__and_Middle_income_Households.pdf
• Institution: Singapore Management University

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.