Medical insurance and healthcare utilization among the middle-aged and elderly in China: evidence from the China health and retirement longitudinal study 2011, 2013 and 2015

Aging populations is becoming a prominent issue facing many countries around the world [1]. In 2017, there were approximately 54 million people aged 45 and above in mainland China, which accounted for up to 40.2% of the population [2]. People have a longer lifespan but also higher morbidity rates due to non-communicable diseases (NCD), such as hypertension, diabetes and cardiovascular disease [3, 4]. In China, an aging population has brought more than 300 million NCD patients across the country which led to increasing healthcare utilization and further straining healthcare services [4‐6]. Therefore, providing high-quality healthcare services is of great need [1, 7].

While China’s Opening up and Reform policies have lifted millions of people out of poverty, there is also a growing gulf between the rich and the poor [8, 9]. Low-income groups suffer greater challenges in accessing healthcare services and are more likely to be impoverished due to the health expenditures. This exacerbates the disparities between the rich and the poor in healthcare utilization [10]. In response to these problems, the Chinese government develops a universal medical insurance system, including the Urban Employees Basic Medical Insurance (UEBMI), the New Rural Cooperative Medical Insurance Scheme (NRCMS) and the Urban Residents’ Basic Medical Insurance (URBMI). Specifically, UEBMI, initiated for urban employees and retired employees in 1998, is a mandatory medical insurance scheme. NRCMS, launched in 2003, is a voluntary medical insurance scheme targeting rural populations. In 2007, URBMI was formulated for urban residents without formal employment who could enroll voluntarily. UEBMI is mainly financed by the payroll taxes from beneficiaries. NRCMS and URBMI are financed by the government and premiums, with the government subsidies accounted for majority of the financing [11]. Then, along with the crucial health system reforms in 2009, great strides have been made to consolidate NRCMS and URBMI into the Urban and Rural Resident Medical Insurance. From 2011 to 2015, the premium for NRCMS and URBMI significantly increased and the benefit packages expanded. In general, the list of medical services eligible for reimbursement for NRCMS and URBMI is shorten than that of UEBMI and the reimbursement rate is even lower [11]. The medical insurance schemes mentioned together with private medical insurances (PMI) comprise the national medical insurance system in China [11]. Consequently, near-universal medical insurance coverage has been achieved, from only 85% (1.13 billion) of the Chinese population covered in 2008 to 95% (1.28 billion) in 2011 and 97% (1.33 billion) in 2015 [12‐14].

Previous studies found that insurances would lower the barriers for individuals to visit a doctor or have physical examinations. As UEBMI individuals provided the most generous benefit packages, individuals covered by URBMI were more likely to use healthcare services, especially inpatient service [15‐18]. However, great strides were made in improving the health system in China and the benefit packages of NRCMS and URBMI were improved. We hypothesized that the promoted medical insurance system could narrow the gaps in healthcare utilization among individuals covered by different medical insurance schemes. Hence, we conducted this study based on a three-year panel data which could track variations in healthcare utilization over time to assess healthcare utilization patterns and analyze the impacts of the medical insurance schemes on healthcare utilization among the middle-aged and elderly in China.

We observed that outpatient service utilization increased in 2013 and then decreased in 2015, while inpatient service utilization increased over time with distinct changes. This indicated that the demands of inpatient care may still not be met. We identified that medical insurance schemes would improve healthcare utilization but different medical insurance schemes exerted various impacts on the middle-aged and elderly.

In our study, more than 60% of the individuals suffered from NCD and about 75% of the individuals did not claim good self-reported health, which indicated the grim reality that there were significant healthcare service demands [24, 25]. It was witnessed a decreasing trend in chronic disease conditions as well as poor self-reported health in contrast to the increasing healthcare service utilization. This may be partly due to improvement for chronic disease prevention and management which allowed the patients to better access the healthcare service [26]. We also found that during the study period, the average utilization rate of outpatient service and inpatient service for the middle-aged and elderly were among 19.3 and 12.7%, respectively, which was consistent with Nation Health Services Survey in China conducted in 2013 (outpatient: 13.7% ~ 26.4%; inpatient: 7.3% ~ 19.9%) [27]. Additionally, we found that the proportion of individuals covered by medical insurance increased in 2013 and then decreased in 2015. Above all, the majority of respondents were members of the NRCMS voluntary scheme. The decrease in medical insurance coverage in our study may be due to the lack of health literacy for the insured to reapply for their insurance schemes. Besides, individuals may choose not to renew membership because they were healthy enough or they failed to receive high-quality services as needed.

We found that individuals with a higher economic status tended to receive more outpatient service and inpatient service, which aligned with the study conducted in Gansu and Zhejiang provinces [15]. Economic status was fundamental to healthcare utilization of individuals and was one of the essential inequity elements favoring the better-off [28, 29]. Despite rapid economic growth following China’s economic reforms in the late 1970s, the gap between the rich and the poor has also increased dramatically [9]. Although the expanded medical insurance could partly alleviate the burden of healthcare service, the impacts were fairly limited. The significant regional disparities in both healthcare resources and quality may impede the healthcare accessibility and affordability of individuals [30].

In our study, individuals covered by medical insurance schemes tended to receive more healthcare services. As a social security system, medical insurance schemes were established to guarantee healthcare utilization as needed and spread the risk of medical expenditures through the co-payment mechanism [31, 32]. Thus, this finding demonstrated that the expanded medical insurance schemes in China may stimulate the healthcare-seeking behaviors of the insured and unleash healthcare demands of the disadvantaged population in general, which was broadly consistent with the existing literature [33‐35]. However, improved access to healthcare services may also vary among individuals with different medical insurance schemes because of the various benefit packages and the different financing schemes [36]. For instance, URBMI did not cover outpatient service so the insured had to pay for outpatient by themselves, while individuals covered by NRCMI could reimburse partial outpatient expenses. This could partly explain our finding that compared with NRCMS, URBMI decreased the likelihood of using outpatient service [11]. We also observed that individuals covered by UEBMI were more likely to receive inpatient service than their counterparts covered by NRCMS. Comparing to NRCMS, UEBMI had more generous benefit package and a higher reimbursement rate [11]. This may motivate the insured to seek healthcare services when sick with chronic or acute conditions. Lastly, the target of UEBMI was employees and retirees in urban areas, who generally had better economic conditions than people in rural areas. This might induce the insured to take advantage of healthcare services and may result in overconsumption of healthcare services [11].

However, there are several limitations subject to this study. All information about healthcare utilization, health status as well as economic status was self-reported and therefore inevitably demonstrated memory bias. Besides, the study population was not the same in three surveys (unbalanced panel data), and the benefit packages of different medical insurance schemes were expanded during the study period. This may affect the impacts of medical insurance schemes on healthcare utilization. Moreover, healthcare utilization was measured by outpatient and inpatient visits. The perspective of healthcare utilization assessment was incomprehensive to some extent. Further study should also take indicators such as the intensity of healthcare services into consideration.

Our findings indicated that increased medical insurance coverage can increase the likelihood of healthcare utilization, especially the inpatient service utilization. Variation of the impacts can be identified among different medical insurance schemes. Further evaluation is needed regarding whether the expanded medical insurance schemes can protect the middle-aged and elderly households from catastrophic health expenditure.