Does Universal Health Coverage at Early Age Reduce Medical Needs at Later Age? Evidence from Vietnam

Abstract

This study examines the impacts of exposure to a universal health coverage policy at early age on utilization of health services at later age. Our empirical strategy identifies the effects of the program by exploiting cross-cohort variation in exposure, generated by the age eligibility of the policy, and cross-province variation in the policy's intensity, generated by differences in provincial geographic characteristics. We find that exposure to the program at early age reduces probability of visit for treatment, mainly hospitalization, but does not affect preventive care and outpatient treatment at later age. Our results are robust to various controls for cohort-varying factors and ongoing poverty-reduction policies. We document larger impacts among individuals from low-income and low-education households, and those living in areas with higher risks from natural disasters. These results imply that the program benefited the most vulnerable population. Exploring potential mechanisms, we find no substantial change in household's financial well-being and household's labor market decisions associated with exposure at early age. Combining with results from previous studies, these findings suggest that the main mechanism is through increases in utilization at early age.