Effect of the catastrophic medical insurance on household catastrophic health expenditure: evidence from China

Abstract

Objective: China launched an innovative program of catastrophic medical insurance (CMI) to protect households from catastrophic health expenditure (CHE) and impoverishment. This article assesses the effect of CMI on relieving CHE and impoverishment from catastrophic illnesses in urban and rural China.

Method: In total, 8378 cases are included in the analysis. We employed descriptive statistical analysis to compare the incidence and intensity of CHE at five health expenditure levels, from 1 June 2014 to 31 May 2015. To illustrate the different protection of the policy, we analyzed the data in two lines, the covered medical expenses and the total medical expenses.

Results: CMI drop down CHE incidence from 4.8% to 0.1% and the mean catastrophic payment gap from 7.9% to zero when only considering covered medical expenses. CMI drop down CHE incidence from 15.5% to 7.9% and the mean catastrophic payment gap from 31.2% to 14.7% when considering total medical expenses. If CMI reimburse uncovered medical expenses at 30%, the mean catastrophic payment gap could be 7.9% and insured person's annual premium will increase US$2.19.

Conclusions: China CMI perfectly meet the pursued policy objectives when only considering the covered medical expenses. However, when considering the total medical expenses, the CMI is only partially effective in protecting households from CHE. The considerable gap is the result of the limitation of CMI list.

Keywords: Catastrophic illness; China; Enfermedades catastróficas; Gasto sanitario; Health expenditure; Health insurance; Major medical insurance; Seguro médico de salud.