Research On Moral Hazard Of Residential Basic Medical Insurance In China

China’s Basic Medical Insurance has basically achieved universal coverage,providing a solid foundation for ensuring people’s health.At the same time,the expenditure of medical expenses in China has risen rapidly in recent years,and the financial sustainability of medical insurance system has gradually become prominent.Whether the medical insurance,which involves third party payment,causes moral hazard and then causes overuse of medical resources has always been an academic concern.Based on the China Health and Retirement Longitudinal Study(CHARLS)wave 2011,2013 and 2015,this paper conducts an empirical study to investigate whether there are moral hazard problems in Residential Basic Medical Insurance(RBMI).Based on the regional variance in reimbursement rules,this paper constructs an ordinary least square(OLS)regression model,and examine the problem for two types of medical services,inpatient and outpatient medical services.The paper uses instrumental variable to solve the potential endogeneity problem.The study finds that on average,as the reimbursement rate increases,there is no significant increase in total cost of hospitalization,and meanwhile,the out-of-pocket hospitalization costs decreases and the number of days in hospital does not change significantly.This indicates there is no moral hazard in the hospitalization service,and the insurance reduces the financial burden of patients.However,when it comes to the outpatient service,as the reimbursement rate increases,total outpatient cost is statistically higher,but out-of-pocket payment does not increase,indicating the existence of moral hazard.The robustness test finds consistent results among the elderly group and the high medical cost group.Heterogeneity tests finds that for both low-income group and high-income group,there is no moral hazard in hospitalization services,but the higher-income group benefits more from health insurance than the low-income group;By region,there may be moral hazard in hospitalization service in the central region,while there is no moral hazard in the west and east.From the point of view of urban and rural areas,there is no moral hazard in hospitalization service in rural hukou population,but moral hazard may exist for the urban hukou population.In addition,the elasticity of medical expenses with respect to medical supply differ from region to region.Based on the above findings,this paper gives some policy recommendations.