Does direct settlement of intra-province medical reimbursements improve financial protection among middle-aged and elderly population in China? Evidence based on CHARLS data

In low- and middle-income countries, social health insurance schemes are the main focus of efforts to achieve universal health coverage (UHC) by promoting access to health care and financial protection. Problems with financial protection in China are caused mainly by health insurance fragmentation and a rapid rise in medical expenditure. In this context, China implemented a policy of direct settlement of intra-provincial medical reimbursement in 2014. We evaluated the impact of the policy on financial protection with a population aged 45 and above based on the China Health and Retirement Longitudinal Study from 2011 to 2018. We estimated the policy effects using the difference-in-differences method, based on coarsened exact matching. We found that the policy significantly reduced the catastrophic health expenditures (CHEs) rate by approximately 10% in the population, whether middle-aged or elderly. Subgroup analyses indicated that middle-aged and elderly people living in western China and with lower household incomes received greater protection from the policy. The CHEs rate for the two age groups in western China was reduced by 16.26% and 20.12%, respectively. The CHEs rate was reduced by 24.51% and 17.32% for middle-aged individuals in the lowest and second household income quartiles, respectively, and by 21.31% for older adults in the second household income quartile. The new rural cooperative medical scheme exerted a smaller protective effect than urban medical insurance among the participants aged 60 and older. We found that in addition to optimizing health insurance schemes, more health care reform measures, such as adopting more efficient payment methods and rationalizing medical expenditures, should be combined to help reduce health inequities and accelerate progress toward achieving UHC and the Sustainable Development Goals.