The Distribution of Health Insurance in China, 1997-2004

Hongwei Xu, Brown University

Decentralization raises concerns about inequality in the distribution of health insurance. This study, using panel data, examines the distribution of health insurance during 1997-2006 in China, when the government intervened to improve access to health care, with specific focus on reducing the rural-urban inequality. The results indicate that the overall health insurance coverage rates improved in the most recent period, from about 23% in 1997 to 47% in 2006. Rural and urban residents became more similar in their chance of being insured between 1997-2006. The outpatient reimbursement rates dropped from about 40% in 1997 to 28% in 2004 but then rose to 40% in 2006. Whereas, the inpatient health care cost paid by insurance also declined from about 63 percent in 1997 to 55 percent in 2006. In addition, the differences in the outpatient and inpatient reimbursement rates have been reduced between the insured rural and urban residents.