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

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  • Jessica Ya Sun

Abstract

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.

Suggested Citation

  • Jessica Ya Sun, 2020. "Welfare consequences of access to health insurance for rural households: Evidence from the New Cooperative Medical Scheme in China," Health Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 337-352, March.
    • Handle: RePEc:wly:hlthec:v:29:y:2020:i:3:p:337-352
    DOI: 10.1002/hec.3985
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    References listed on IDEAS

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