New Study Reveals Health Insurance Expansion Significantly Improves Well-Being

Ample data show that health insurance coverage improves beneficiaries’ subjective well-being (SWB) by reducing financial burdens and enhancing access to healthcare. Yet, there remains a scarcity of evidence documenting this relationship in low- and middle-income countries. A new study now fills this gap, offering compelling evidence from China’s effort to expand and integrate health insurance programs to achieve universal health care. This is a particularly noteworthy case study due to China’s vast population and recent strides in expanding subsidized health insurance coverage.

Published in the journal Health Policy and Planning, the study sheds light on the profound impact of China’s urban-rural health insurance integration reform on beneficiaries’ SWB. The study’s co-authors — including Karen Eggleston, the director of APARC’s Asia Health Policy Program (AHPP), Peking University’s Gordon Liu, and Renmin University of China’s Qin Zhou, a former visiting scholar with AHPP — analyzed individual-level data on the integration of China’s rural and urban resident health insurance programs to assess residents’ SWB as measured by self-reported life satisfaction.

They found that the integration policy significantly improved the life satisfaction of rural residents, particularly among lower-income and elderly individuals, with positive impacts on mental health, outpatient care utilization, and health behaviors. There was no similar discernible impact on urban residents’ SWB, indicating that the reform helped reduce inequality in healthcare access and outcomes for rural residents in poorer communities without causing any negative effects on their urban counterparts.

This study is part of the researchers’ ongoing empirical exploration of this policy's impact on multiple dimensions of health and well-being among China's vulnerable populations.

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Financing Health and Well-Being for All

In 2016, China launched its urban-rural health insurance integration reform, pooling two insurance programs to provide the same health service package and health insurance benefits for rural and urban residents, thus elevating the healthcare coverage of rural residents to match that of their urban counterparts who were not enrolled in urban employee insurance. Taking a key step toward achieving universal health coverage, improving beneficiaries’ health equality and well-being is core to this policy. The study by Eggleston and her colleagues is the first to provide national-level evidence of the policy’s impact on residents’ SWB.

The researchers analyzed data from five waves of the China Health and Retirement Longitudinal Study (CHARLS, a detailed, nationally representative survey of adults over the age of 45 years and their spouses) between 2011 and 2020, capturing changes in SWB as measured in life satisfaction before and after the implementation of the reform. They investigated seven potential mechanisms through which the integration policy might influence life satisfaction, including healthcare utilization, financial risk protection, selection of healthcare providers, health status, health behaviors, self-reported satisfaction with health, and family economic benefits.    

Their analysis reveals that rural communities saw a substantial boost in life satisfaction following the implementation of the integration policy. This increase was particularly pronounced among older adults and those with lower economic status, highlighting the policy's success in narrowing health disparities and improving well-being among vulnerable populations. For urban residents, integration has no significant impact.

The findings indicate that increased outpatient care utilization, improved health status, and better financial risk protection were among the key mechanisms associated with the positive outcomes observed among rural residents. By expanding coverage and reducing financial barriers to care, the reform empowered beneficiaries to prioritize their health and well-being without fear of crippling medical expenses. Importantly, the findings also illuminate the reduction in depressive symptoms among rural residents after the integration. Thus, mental health, often overlooked in discussions about healthcare reforms, emerged as a crucial channel of overall well-being.

“This study contributes to a better understanding of the impacts of urban-rural health insurance integration reform in China and provides evidence-based guidance for policy improvement,” Eggleston and her colleagues summarize.

The study’s findings also have broader implications for global efforts to achieve universal health coverage, suggesting that such universal coverage may enhance SWB, especially for vulnerable groups in low- and middle-income economies. As countries pursue universal health care, lessons from China's experience offer valuable insights into the potential benefits of comprehensive health insurance reforms. By addressing systemic inequalities in healthcare access, governments can improve health outcomes and enhance overall societal well-being.