Impact of Urban-Rural Health Insurance Integration on Health Care: Evidence from Rural China

Abstract In recent years, Chinese local governments have experimented with integrating the social health insurance system segmented between rural and urban areas to unify the administration, policy, and funds of various health insurance programs. In this study, we take advantage of the staggered implementation of the urban-rural health insurance integration across cities over time to examine the impacts of the integration on rural residents' health care utilization and health outcomes. Based on an original city-year level policy dataset and the China Health and Retirement Longitudinal Study (CHARLS) for the years 2011, 2013, and 2015, we find that the integration significantly increases the middle-aged and older rural residents' inpatient care utilization and this positive effect is particularly salient in poor areas. Moreover, we find that the positive policy effect of integration is attributed to enhanced health insurance benefits, such as a higher reimbursement rate for inpatient care. However, the integration has limited impacts on the middle-aged and older rural residents' health outcomes. This study reveals the partial success of urban-rural health insurance integration to reduce health care inequality in China.