Empirical Study On Adverse Selection Of Social Medical Insurance In China

Social medical insurance system plays an important role in serving the construction of multi-layer medical security system and meeting the growing demand of the people for a better life.It is an important part of social security system.But its own development also faces many problems,especially the adverse selection problem in the social medical insurance system,which makes the individuals with higher risk have the motivation to choose more adequate insurance,and affects the smooth operation of the social medical insurance fund.Chiappori and salanie(2000)systematically studied the general method of testing the existence of information asymmetry in empirical research,namely PCP(positive correlation property test).However,in the classical positive correlation test,there are two defects: First,the traditional positive correlation test does not include the impact of consumer risk heterogeneity on consumers’ purchase of insurance contracts and the relationship between consumer risk heterogeneity and adverse selection.In reality,there may be cases that risk averse people are in good health and will actively participate in insurance.Second,another defect of the traditional positive correlation test is that it is unable to further distinguish adverse selection and moral hazard(Chetty and Finkelstein,2012).Taking social medical insurance in China as an example,this paper attempts to further improve the positive correlation test of information asymmetry.Firstly,based on the empirical analysis of the impact of health factors on the insured’s participation in medical insurance,this paper further analyzes the impact of risk preference on the insured’s participation in medical insurance.Secondly,CFPS 2014-2016 personal tracking survey data were selected,and panel logit was used Excluding the factors that do not change with time,the samples were divided into two groups: the treatment group did not have medical insurance for urban employees or urban residents or new rural cooperative medical insurance in 2014,the control group did not have any social medical insurance in 2014-2016.using the data of two periods of individual follow-up survey,the medical insurance rules adopted by the treatment group and the control group in the first period are the same,which can further eliminate the possible moral hazard effect caused by the mixing of different insurances.By using the survey data of China family tracking survey(CFPS)from 2014 to 2016,the empirical results show that:(1)there is adverse selection in China’s social medical insurance,that is,the group with high health risk is more likely to participate in the insurance than the group with low health risk.(2)After the introduction of risk preference variables,the deterioration of physical condition is significantly related to whether to participate in the insurance,and the risk averse have a strong willingness to participate in the insurance.It can better explain the impact of the heterogeneity of risk preference on adverse selection of social medical insurance system in China.(3)The difference of medical expenditure between the treatment group and the experimental group in the first period can be judged to be the difference of health risk between the individuals who participate in social medical insurance and those who do not.