Does Health Insurance Decrease Health Expenditure Risk in Developing Countries? The Case of China
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This paper studies the impact of health insurance on individual out-of-pocket (OOP) health expenditure in China. Using the China Health and Nutrition Survey data between 1991 and 2006, we apply two-part and sample selection models that address key empirical challenges: censored data and selection on unobservables. We find that although the probability of positive OOP health expenditures increases with the availability of health insurance, the actual level of OOP health expenditures decreases. More specifically, for a person with positive OOP health expenditures, having health insurance reduces the level of OOP expenses by 11.4 - 13.6 percent. This result is highly statistically significant. If, on the other hand, the level of OOP expenses is a priori unknown, we do not find a significant relationship between health insurance and OOP spending levels. In addition, health insurance has stronger effects for individuals with either very low or very high health spending levels based on results from a quantile regression
RPRT
Working Paper
Jung, Juergen
Liu, Jialu
2014
1212