Insuring against health shocks: Health insurance and household choices

Smoothing consumption in times of illness: Household recourse mechanisms

We study the welfare impacts of illness shocks on rural agricultural households in the semi-arid tropical and humid eastern regions of India. These regions are characterized by rainfed agriculture, missing markets for credit and insurance, and limited access to publicly funded healthcare infrastructure. We find that illness shocks increase households' medical expenditures and reduce wage income. However, aggregate non-medical, food, and non-food consumption expenditures are insensitive to illness shocks. Disaggregating illness by the age and the gender of the household members, we observe that illness in male children leads to the largest increase in medical expenditure, and illness in prime-aged adults leads to the largest decline in per-capita wage earnings. We also find illness shocks leading to changes in household dietary diversity, higher travel expenditures, and a compensating reduction in spending on education and entertainment. Analysis of risk-coping strategies reveals that households rely on transfers from kinship networks and loans from informal sources like local moneylenders to smooth consumption. While large landowners rely on gifts from kinship networks, landless and smallholders increase borrowings from informal sources.

Parental health penalty on adult children's employment: Gender differences and long-term consequences

This study examines the gender-specific and enduring impacts of parental health shocks on adult children's employment in China, where both formal care and health insurance are limited. Using an event-study approach, we establish a causal link between parental health shocks and a notable decline in female employment, which persists for at least six years following the shock. Male employment, however, exhibits minimal change on average, although this conceals an increase among poor families, indicating a channel beyond heightened informal care. Our findings underscore the consequences of "growing old before getting rich" for developing countries.

Health and health system effects on poverty: A narrative review of global evidence

Ill-health causes poverty. The effect runs through multiple mechanisms that span lifetimes and cross generations. Health systems can reduce poverty by improving health and weakening links from ill-health to poverty. This paper maps routes through which ill-health can cause poverty and identifies those that are potentially amenable to health policy. The review confirms that ill-health is an important contributor to poverty and it finds that the effect through health-related loss of earnings is often larger than that through medical expenses. Both effects are smaller in countries that are closer to universal health coverage and have higher social safety nets. The paper also reviews evidence from low- and middle-income countries (LMICs) and the United States (US) on the poverty-reduction effectiveness of public health insurance (PubHI) for low-income households. This reveals that PubHI does not always deliver financial protection to its targeted population in LMICs. Countries that have succeeded in achieving this goal often combine extension of coverage with supply-side interventions to build capacity and avoid perverse provider incentives in response to insurance. In the US, PubHI is effective in reducing poverty by shielding low-income households with children from healthcare costs and, consequently, generating long-run improvements in health that increase lifetime earnings. Poverty reduction is a potentially important co-benefit of health systems.

Assessing the impact of public insurance on healthcare utilization and mortality: A nationwide study in China

We investigate the effects of a significant health insurance expansion in rural China known as the New Cooperative Medical Scheme (NCMS). Our analysis is based on a nationwide dataset spanning from 2004 to 2011. We find that the NCMS effectively increases healthcare utilization, particularly inpatient admissions, and reduces the incidence for infectious diseases. In addition to the increased healthcare utilization, the reduction in the incidence for infectious diseases can be attributed to improved health knowledge and health behavior, both of which are associated with the expansion of insurance coverage. Our findings affirm the importance of insurance coverage in safeguarding low-income individuals from the adverse health consequences linked to infectious diseases.

Medical insurance, vulnerability to poverty, and wealth inequality

Background

China has made remarkable achievements in alleviating poverty under its current poverty standards. Despite these immense successes, the challenge of consolidating these achievements remains. In reality, health risks are among the significant factors causing rural households to fall into poverty, and medical insurance is the significant factor mitigating household vulnerability to poverty. Therefore, alleviating or guarding against households falling into poverty is essential.

Methods

This paper establishes a multi-equilibrium model that incorporates heterogeneous health risks and medical insurance. Through parameter calibration and value function iteration, numerical solutions are derived.

Results

Heterogeneous health risks significantly increase poverty vulnerability and wealth inequality in rural households. Medical insurance, through its investment incentives and loss compensation effects, efficiently mitigates these issues, especially benefiting those in poorer health. Furthermore, the dual-slanted compensation policy efficiently mitigates the adverse effects of "reverse redistribution."

Conclusion

Medical insurance effectively mitigates household vulnerability to poverty and wealth inequality. Government departments must establish health records for residents. By recognizing variations in health conditions, these departments can provide households with poorer health conditions with a higher medical expense compensation ratio. In addition, the government should further focus medical expense reimbursements toward households on the cusp of escaping poverty to ensure that they are not plunged back (or further) into poverty due to medical expenses.

Growing up without health insurance: Evidence from rural China

This paper examines the long-term effects of health insurance on children's educational attainment in a developing country. Utilizing the county-by-county rollout of the New Rural Cooperative Medical Scheme in rural China, we find that exposure to the health insurance program in early life leads to improved educational attainment in adulthood. Empirical tests suggest that a short-term increase in health care utilization is unlikely to be a potential channel. We provide some evidence for the channel that health insurance reduces household financial burdens and increases household expenditure on children's nutrition.

A study on the impact of health shocks on subjective wellbeing of middle-aged people and older adults-Evidence from China

Introduction

The health issues that afflict middle-aged people and older individuals are a significant factor that affects their quality of life. It is crucial to investigate the impact of health shocks on the subjective wellbeing of this demographic and the mechanisms that underlie this impact to promote healthy aging.

Methods

This study utilized data from the China Family Panel Study in 2018 and 2020 to analyze the effects of HSs and their categories on the subjective wellbeing of middle-aged people and older individuals using the propensity score matching difference-in-differences method. Additionally, the study explored the mediating role of social participation.

Results

The findings indicate that health shocks, both chronic and acute, diminish the subjective wellbeing of middle-aged people and older adults. Furthermore, these shocks have a more significant negative effect on the subjective wellbeing of individuals aged 60 and above, women in the middle-aged and older demographic, individuals in rural areas who belong to the middle-aged and older age groups, and individuals possessing activities of daily living. The mechanism analysis revealed that health shocks, both chronic and acute, reduce the subjective wellbeing of middle-aged people and older individuals by disrupting partnerships.

Discussion

Lowering the possibility of health shocks, the government should build a strong health management system and improve the health insurance system to enable timely treatment for persons suffering from health shocks. Individuals and families should live healthy lives and engage in social activities to avoid health shocks and improve subjective wellbeing.

Adverse health shocks, social insurance and household consumption: evidence from Indonesia's Askeskin program

This study examines the efficacy of Askeskin, a subsidized social health insurance targeted towards poor households and informal sector workers in Indonesia, in mitigating the impact of adverse health shocks on household consumption. To overcome selection bias from non-experimental nature of Askeskin enrolment, I use a robust estimation strategy, where outcome regressions are run on a propensity score-based matching sample. Using longitudinal data from the Indonesia Family Life Survey, this study finds that uninsured households facing extreme health health shocks experience a 1.3% point loss in growth in food and 2% point loss in non-food consumption growth. Importantly, households having Askeskin insurance, are fully insured in terms of food and medical consumption. But non-food spending, a discretionary component, is not insured fully resulting in a 1.2% point fall in consumption growth rate, despite Askeskin. This result is robust to a battery of sensitivity and robustness checks, including alternate definition of health shocks. Further, I investigate whether the Askeskin program simply displaced informal, community-based mechanisms of risk sharing. No crowd out effect is observed and informal risk-sharing coexists with Askeskin.

Public long-term care insurance and consumption of elderly households: Evidence from China

This study investigates the impact of long-term care insurance (LTCI) on the non-health consumption of elderly households. By exploiting a quasi-experiment on the public LTCI pilot program in China, we identify the effect of LTCI using a triple-difference approach. Using longitudinal data from the China Health and Retirement Longitudinal Study, we find that LTCI has led to an increase in the non-health consumption of elderly households by 15.7%, mostly observed in households having no older members with need for long-term care (LTC). Further evidence suggests that the effects are stronger for households with higher expected LTC risks, less wealth or family insurance, and covered by more generous schemes. Finally, LTCI increases the expectation of using formal LTC when disabled and subjective longevity expectations for older adults having no need for LTC. Overall, these findings offer empirical support for the role of LTCI in mitigating precautionary savings against LTC risks.

Out- Of- Pocket health expenditure and household consumption patterns in Benin: Is there a crowding out effect?

Health shocks are common and have serious consequences for households in developing countries where health insurance is lacking. In this study, we examine whether out-of-pocket health expenditures crowd out household consumption of non-healthcare necessities, such as education items in Benin using a sample of 14,952 households from the global vulnerability and food security analysis survey. We estimated a system of conditional Engel curves with three stage least squared (3SLS) and seemingly unrelated regression (SURE) for seven categories of goods using the Quadratic Almost Ideal Demand System (QUAIDS) in the form of budget shares corresponding to proportions of total non-health expenditure. Findings show that out of pocket health expenditure leads households to spend more on health care that in fine crowd out expenditure in other necessity goods such as education item. These findings highlight the need for social protection programs to mitigate the impact of health shocks on vulnerable households in Benin.

Configurations of the driving factors promoting China's commercial health insurance: A comparative qualitative analysis based on the technology–organization–environment framework

With the nation's remarkable improvement in living standards, China's health insurance system cannot satisfy people's higher demands; therefore, it is necessary to promote the supply of commercial health insurance (CHI) in China. Based on the technology–organization–environment (TOE) framework, this study constructs a novel analysis framework to investigate the driving path of China's CHI. Employing the data of 31 provincial regions of China in 2018, a fuzzy-set qualitative comparative analysis is conducted to analyze configurations. We also adopt a necessary condition analysis in the robustness check to examine the necessary conditions, determining that no necessary relationship exists between possible conditions and the performance of CHI. More particularly, three sufficient configurations, TOE strategy, government attention (GA)–environment adaptability (EA)–citizen demand (CD) strategy, and dual EA–CD strategy are demonstrated to achieve high performance, and the other three configurations of technological management capability (TMC)–EA-CD strategy, technological infrastructure (TI)–EA strategy, and combined TI–TMC–EA strategy do not result in high performance. In addition, technological conditions (TI and TMC) and EA are relatively more important than the other configurations. Notably, government departments' financial expenditure is found to have a negative effect on CHI promotion.

Can Mobile Payment Increase Household Income and Mitigate the Lower Income Condition Caused by Health Risks? Evidence from Rural China

China has moved into a new stage of its fight against poverty, where the further raising of rural household income is of great importance. Health risk is one of the biggest obstacles to the poverty reduction progress. Therefore, how to cope with the negative effects of health risks has attracted the attention of scholars, especially in the background of the global outbreak of COVID-19. In this paper, we try to explore whether mobile payment, a new form of payment, can improve the income of rural households and mitigate the lower income condition caused by health risks in China. Using data from the 2017 China Household Finance Survey, we found: (1) mobile payment can substantially increase rural household income; (2) health risks will lower the income of rural residents, but mobile payment can lessen this negative effect. Mechanism analysis indicates that mobile payment is likely to ease liquidity constraints, increase social interaction, and stimulate entrepreneurship for rural households. We advised the government to promote mobile payment adoption in rural areas and enhance its design. Additionally, better medical resources should also be made available to rural households.

Health Shocks and Economic Well-being of the Aging Population: Evidence from Mexico

We exploit the longitudinal Mexican Health and Aging Study to estimate the effects of health shocks in the short-run on the subsequent economic well-being of the aging population in Mexico. While there is substantial evidence indicating negative economic effects of such changes in industrialized countries, little is known about health impacts on the future economic position of older adults in low- and middle-income countries. This paper takes an important step towards filling this gap in knowledge. Our results are widely relevant, with a large percentage of the world's population residing in developing countries such as Mexico that are experiencing rapid aging. We find evidence of negative impacts of health shocks on subsequent economic well-being of older adults in Mexico, but the effect varies according to several dimensions. First, the impact is clearly on income, not wealth. Second, responses are heterogenous across sources of income, with evidence of an impact mainly on labor income. Third, we find clear differences by gender in the impact of a health shock, with a larger negative impact on men. Fourth, we conclude that the population groups most negatively affected are those with the greatest degree of vulnerability prior to the shock, as measured by education and access to health insurance. Even though Mexico has made important gains with anti-poverty programs such as the Programa 70+ pension and a move towards universal health insurance, additional interventions targeted at the most vulnerable subsets of the aging population might be warranted.

Effects of Health Shocks, Insurance, and Education on Income: Fresh Analysis Using CHNS Panel Data

The most important asset for a person is their health and wellbeing. While it is possible to keep one’s health at its best, it is common for people to have health shocks (HSs; negative shocks to an individual’s health). In this study, using Chinese Health and Nutrition Survey (CHNS) panel data, we studied the impact of different HSs on income using new modified methods. Thus, we considered the substantial links among different HSs, levels of education, and insurance types, as well as their impact on people’s wealth defined by their income. The core aim of this study is to help devise and guide new policies to reduce the effect of these HSs through the proper use of education and insurance channels. In this research, we used simple pooled OLS regression to measure the different causality estimates of HSs, education, and insurance, as well as their interactions. Obtained through the use of up-to-date panel data, the study results are consistent with previous research using different HS and education measures. The findings of this research suggest revising previous policies concerning education levels and health insurance schemes.

Coping with the consequences of short-term illness shocks: The role of intra-household labor substitution

In developing countries where medical infrastructure, service delivery systems, and the markets for health insurance are underdeveloped, one important mechanism to cope with the consequences of health shocks is the intra-household substitution of labor. This paper studies the impact of short-term illness shocks on labor supply and wage earnings of prime-aged individuals using data from agricultural households in India. It also documents the compensating intra-household labor supply responses of other non-ill members of the household. We find that an illness shock reduces an individual's monthly wage earnings by 7.1% via the decline in the individual's days of employment in the labor market. Further, an illness shock to the household head causes a compensating increase in the wage labor supply of the wife. An illness shock to the wife, however, induces the household head to devote more time to domestic activities. The compensating labor supply responses are only partially able to insure the loss in total wage income of the household. Our results indicate that the gender-based specialization of labor weakens in the event of an illness shock.

Public Health Insurance and Enrollees’ Diet Structure in Rural China

This study examines the consumption-stimulation function of public health insurance (PHI) programs from the perspective of food consumption. We estimate the impact of enrollment in rural China's PHI program, the New Cooperative Medical Scheme (NCMS), on the insured's diet diversity and diet balance using panel data from the China Health and Nutrition Survey. Exploiting temporal and spatial variations in the program's local implementation, our difference-in-differences estimation (combined with propensity score matching in some analyses) reveals significant increases in the insured's diet diversity, overall diet balance, and nutrition intakes. However, the program's consumption-stimulation function is not entirely beneficial. While NCMS enrollment reduced the incidence of under-consumption of animal products and fruits, it raised that of over-consumption of grains, imposing potential health risks on the insured.

Precautionary savings and shock-coping behaviors: Effects of promoting mobile bank savings on transactional sex in Kenya

For the vulnerable, even small shocks can have significant short- and long-term impacts. Beneficial shock-coping mechanisms are not widely available in sub-Saharan Africa. We test whether an individual precautionary savings intervention can reduce a shock-coping behavior common in sub-Saharan Africa that has negative spillovers: transactional sex. Among a set of vulnerable women, we randomly assigned an intervention that promoted savings in a mobile banking account labeled for goals and emergency expenses. We find that a majority of individuals adopt the mobile account and the intervention led to reductions in transactional sex as a shock-coping response, and a decrease in symptoms of sexually transmitted infections. Changes are sustained in the medium-term among sex workers, but not among other vulnerable women.

Crowding-Out or Crowding-In: Government Health Investment and Household Consumption

This paper explores the relationship of government health investment and household consumption by applying a panel fixed effects model and Sobel-Goodman mediation tests to inland Chinese provinces. The empirical results highlight that government health investment has a crowding-in effect and can thus promote household consumption. Furthermore, the promotion effect on non-medical health consumption is greater than that on medical health consumption. The promotion effect of government health investment on rural household consumption is higher than that on urban household consumption, and the promotion effect on household consumption for northern provinces is higher than that in southern provinces. This heterogeneous effect is closely related to the difference between urban and rural development; and the economic levels of the northern and South regions. The mediation tests found that government health investment mainly promotes regional economic growth, and then increases household consumption. In the economic and social development process, the government should implement more effective medical and health care measures to increase social medical and health investment to improve the consumption level of households.

The role of financial conditions for physical and mental health. Evidence from a longitudinal survey and insurance claims data

BACKGROUND

Both theory and empirical evidence suggest that financial conditions are influential for mental health and might contribute to physical health outcomes.

METHODS

Using longitudinal survey data and health insurance claims data from 1209 employees in a large U.S. health insurance company, we examined temporal associations between measures of financial safety, financial capability, financial distress, their summary index (financial security) and six subsequently measured mental and physical health outcomes.

RESULTS

We found that financial safety and financial capability were positively associated, while financial distress was negatively associated, with subsequent self-reported measures of physical and mental health, even after controlling for these health measures at baseline and other confounders. Additionally, financial conditions were associated with reduced risk of depression based on health insurance claims data. Financial safety was also associated with anxiety.

CONCLUSIONS

Policy-makers might consider the introduction of more effective measures for ensuring favorable financial conditions as an important contributor to better population health. Furthermore, policy could encourage teaching adequate financial management techniques and the importance of understanding of long-term consequences of financial decisions, as those might be pivotal for health outcomes.

The Effect of Health Shock and Basic Medical Insurance on Family Educational Investment for Children in China

This paper explores the role of basic medical insurance in protecting family investment in child education. First, this paper establishes a two-phase overlapping generation model to theoretically analyse the impact of basic medical insurance on investment in child education under the influence of the impact of parental health. The results show that health shock reduces parental investment in child education, and medical insurance significantly alleviates the negative impact of parental health shock on investment in child education. Furthermore, this paper establishes a two-way fixed effect regression model based on the data of China Family Panel Studies (CFPS) in 2014 and 2016 to empirically test the above results. The results showed that parental health shocks negatively affect investment in child education, and paternal health shock has a more significant impact than maternal health shock. However, medical insurance significantly reduces this negative impact, provides security in investment in child education, and promotes the improvement of human capital.

The long-run effects of noncommunicable disease shocks

The health shocks literature typically does not take into account the temporal patterns of loss since the time of the shock. This limits understanding of the long-run impact of health shocks and the capacity of individuals to cope over time. This study estimates the dynamic effects of a noncommunicable disease shock on the economic well-being of working-age individuals in China up to 6 years after onset. We find that after a period of temporal loss, individuals and their families can insure consumption against the average noncommunicable disease shock over the long-run. We observe significant heterogeneity according to the persistence of the disease, value of household wealth, and health insurance status. Individuals with consistent onset, with below median wealth, and without health insurance are least equipped to smooth consumption over the long-term.

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

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.

A double safety net? Understanding interactions between disability benefits, formal assistance, and family support

While the main insurance sources for individuals with disability are understood, less is known about how family support interacts with federal disability benefits. Using the Health and Retirement Study matched to administrative records, I examine how disability benefits affect family support by comparing accepted and rejected disability applicants before and after benefit receipt. Receipt of disability insurance increases the probability of receiving any assistance from children by 18 percent and more than doubles the amount of in-kind assistance. Disability insurance also increases the probability that children are paid for their help and reduces children's labor supply. These findings are largest for low-income beneficiaries and those who recently lost a spouse, suggesting that child assistance complements income provided by disability insurance, and substitutes for other family assistance. Receipt of disability benefits allows the family to re-optimize how they provide support, and disability insurance is shared within the family in complementary ways.

Effect of a medical subsidy on health service utilization among schoolchildren: A community-based natural experiment in Japan

Reducing out-of-pocket medical payments for children can reduce financial barriers to healthcare, but may increase health service expenditure. Efficient schemes of patient cost-sharing are needed to address this. We explored the impacts of a medical subsidy for children (MSC), which contained two schemes for cost-sharing of medical expenditure and health service utilization. The first is a monthly stop-loss policy, or caps on out-of-pocket payments, for outpatient/inpatient services; this reduces out-of-pocket payments for those who use greater amounts of health services. The second is a free prescription policy, which eliminates out-of-pocket payments regardless of the amount of drug expenditure. Expansion of the MSC was used as a natural experiment in a Japanese prefecture. We analyzed Japanese National Health Insurance claims data covering April 2013 to January 2017, and found no significant effect of the stop-loss policy on outpatient/inpatient service expenditures, regardless of the children's baseline health status. The free prescription policy, however, significantly increased prescription drug expenditure to 116% in the total sample and 121% among children with good health status, but not among children with poor health status. Increased health expenditure among healthy, low-volume users was found to cause increased overall expenditure. The stop-loss policy for children is potentially efficient because it selectively reduced out-of-pocket payments in high-volume users and did not increase overall expenditure.

Monthly spending dynamics of the elderly following a health shock: Evidence from Singapore

We use novel longitudinal data from 19 monthly waves of the Singapore Life Panel to examine the short-term dynamics of the effects health shocks have on household health and nonhealth spending and income by the elderly. The health shocks we study are the occurrence of new major conditions such as cancer, heart problems, and minor conditions (e.g., diabetes and hypertension). Our empirical strategy is based on an event study approach that exploits unanticipated changes in health status through the diagnosis of new health conditions. We find that major shocks have large and persistent effects whereas minor shocks have small and mainly contemporaneous effects. We find that household income reduces following a major shock for males but not females. Major health shocks lead to a decrease in households' nonhealth expenditures that is particularly pronounced for cancer and stroke sufferers, driven largely by reductions in leisure spending. The financial impact of major shocks on medical saving account balances occurs to those without private health insurance, whereas the impact is on cash balances for privately insured individuals.

Unintended consequences of supply-side cost control? Evidence from China's new cooperative medical scheme

We examine the effects of a "per-episode fee limit" that was recently implemented as a cost-control policy in China's health care system. Using hospital administrative data on a rural public health insurance program in China, we find that hospital departments dynamically adjust episode fees in response to the level of stress under fee limits. We also document anomalous cycles in the fees and length of stay of discharged episodes, which are consistent with the dynamically optimizing behavior to comply with the fee limit. We find qualitatively similar results in administrative data from an urban public health insurance program.

The COUNTDOWN Study Protocol for Expansion of Mass Drug Administration Strategies against Schistosomiasis and Soil-Transmitted Helminthiasis in Ghana

(1) Background: Current international policy for schistosomiasis and soil-transmitted helminthiasis (STH) control emphasises mass administration of deworming drugs in school-based programmes. However, this approach is insufficient to control the transmission of these diseases, and their burden in non-school cohorts is recognised, albeit under-researched. This research will investigate the feasibility and acceptability of expanding access to praziquantel (PZQ) against schistosomiasis, and albendazole (ALB) against STH, to communities in selected transmission settings in Ghana. (2) Methods: A three-site longitudinal study will be implemented to investigate the effectiveness of expanding treatment strategies for PZQ and ALB to community members. In the context of community mass drug administration (to preschool children, school non-attending children, and adults, including pregnant women), the intervention will be assessed in a random sample of community members, at baseline with follow-up at 6, 12, and 18 months. In each community, 658 participants will be enrolled, and 314 followed up at each time point. The primary outcome measure is the prevalence of infection of Schistosoma haematobium and/or S. mansoni at study endpoint, as assessed by longitudinal surveys. Secondary outcomes are to quantify the infection of schistosomiasis and STH infections in non-treated cohorts, reductions in prevalence of STH, and intensity of schistosomiasis and STH, and treatment coverage. Nested within this study will be qualitative, cost-benefit, and cost-effectiveness evaluations that will explore accessibility, feasibility, and economic impact of expanded treatment from different complementary perspectives. (3) Discussion: Using a multidisciplinary approach, this study will generate evidence for improved availability, acceptability, affordability, and accessibility to deworming drugs against schistosomiasis and STH to individuals and communities in Ghana. This is likely to have considerable research, programmatic, and political value to contribute evidence for national programme policy development within Ghana, and, more broadly, World Health Organization policy development.

Mitigating the consequences of a health condition: The role of intra- and interhousehold assistance

The behavior of noncoresident family members motivates much of the literature on consumption smoothing, risk-sharing, and informal networks, yet little is known empirically on the topic due to a lack of data simultaneously observing multiple households in an extended family. This study utilizes genealogically linked longitudinal data to examine how extended family networks insure against financial risks from severely limiting health conditions. We find that nonhealth consumption of unmarried households declines in response to worsening health, whereas married households smooth expenditures in a way that is consistent with full insurance. Families mitigate losses by reallocating home production, drawing down home equity, holding formal health insurance, collecting social security, and receiving transfers from noncoresident relatives. We illustrate that the costs of health shocks are transmitted throughout family networks, and that noncoresident children draw down their assets and consumption when responding to a parent's health decline.

China's Health Reform Update

China experienced both economic and epistemological transitions within the past few decades, greatly increasing demand for accessible and affordable health care. These shifts put significant pressure on the existing outdated, highly centralized bureaucratic system. Adjusting to growing demands, the government has pursued a new round of health reforms since the late 2000s; the main goals are to reform health care financing, essential drug policies, and public hospitals. Health care financing reform led to universal basic medical insurance, whereas the public hospital reform required more complex measures ranging from changes in regulatory, operational, and service delivery settings to personnel management. This article reviews these major policy changes and the literature-based evidence of the effects of reforms on cost, access, and quality of care. It then highlights the outlook for future reforms. We argue that a better understanding of the unintended consequences of reform policies and of how practitioners’ and patients’ interests can be better aligned is essential for reforms to succeed.

Parental health shocks and schooling: The impact of mutual health insurance in Rwanda

The goal of this study was to look at the educational spill-over effects of health insurance on schooling with a focus on the Rwandan Community Based Health Insurance Programme, the Mutual Health Insurance scheme. Using a two-person general equilibrium overlapping generations model, this paper theoretically analyses the possible effect of health insurance on the relationship between parental health shocks and child schooling. Individuals choose whether or not they want to incur a medical cost by seeking care in order to reduce the effect of health shocks on their labour market availability and productivity. The theoretical results show that, health shocks negatively affect schooling irrespective of insurance status. However, if the health shock is severe (incapacitating) or sudden in nature, there is a discernible mitigating effect of health insurance on the negative impact of parental ill health on child schooling. The results are tested empirically using secondary data from the third Integrated Household Living Conditions Survey (EICV) for Rwanda, collected in 2011. A total of 2401 children between the ages of 13 and 18 are used for the analysis. This age group is selected due to the age of compulsory education in Rwanda. Based on average treatment effect on treated we find a statistically significant difference in attendance between children with MHI affiliated parents and those with uninsured parents of about 0.044. The negative effect of a father being severely ill is significant only for uninsured household. For the case of the mother, this effect is felt by female children with uninsured parents only when the illness is sudden. The observed effects are more pronounced for older children. While the father's ill health (sever or sudden) significantly and negatively affects their working hours, health insurance plays appears to increase their working hours. The effects of health insurance extend beyond health outcomes.