Peasants’ Decision Of Medical Insurance And Its Impact On Medical Expenditures Under NRCMS

Chronic illness has become an important public health problem and one of the biggest challenges to the country’s public health system in the global scope. Meanwhile, the medical expenditures are going on increasing. In order to relieve the striking contradictions between the limited payment capacity of the peasants and the rising medical expenditures in the rural area, the Chinese Government established a New Rural Cooperative Medical Service System (NRCMS) in2002. Much progress has been made in the development and management of NRCMS. Furthermore, the government proposes that NRCMS and commercial health insurance should be developed together to build the multi-level rural medical insurance system. But NRCMS which aims at resolving the risk of peasants’serious illness doesn’t cover the comprehensive prevention and control for chronic illness. The commercial health insurance doesn’t play a great part in the rural medical health insurance system because the peasants’consumption of commercial health insurance is insufficient. China is an agricultural county with a majority of farming population. The problem of peasants is the core of the problems of agriculture, rural and peasants. And the problem of peasants’ medical insurance is one of the main points of the problem of peasants. Accordingly, this dissertation which studies on how to satisfy the peasants’ demand of medical insurance and medical care, how to develop and perfect the present multi-level rural medical insurance system, possesses quite significant sense in both theory and realism.Based on a review of the relevant studies, the dissertation summarizes the change of the rural medical insurance system and the different characteristics of each stage. Meanwhile, take the case of J country to make a deep analysis in the existing policies, its Impact on the peasants’health insurance and medical care, and the problem in the security of the rural medical insurance system. Then, according to the utility function, the model of the consumer’s decision of medical insurance and medical care is developed to investigate the peasant’s decision of medical insurance and medical care under the rising of medical care’s price, and the research hypotheses of purchasing the commercial health insurance and medical care for the peasants are put forwarded. Based on this basis, the dissertation applies probit model and bivariate probit with partial observability model to investigate the key factors that influence the peasants’ purchasing commercial health insurance to the survey data in J country. Then, two-part model, bivariate probit simultaneous equations and treatment effects model are used to assess the impact of commercial health insurance and chronic conditions on medical expenditures. Finally, the political suggestions which include raising the benefits of NRCMS for chronic illness and developing the market of commercial health insurance are proposed based on the theoretical and empirical analysis. The main conclusions of the dissertation can be categorized as follows:First, NRCMS has a "crowding out" impact on commercial health insurance. The increase in peasants’satisfaction for NRCMS reduces the demand of commercial health insurance.Second, adverse selection occurs in the enrolled peasants’decision of purchasing commercial health insurance. Compared to the enrolled peasants who haven’t been afflicted with chronic illness, the probability of purchasing commercial health insurance for the enrolled peasants who have been afflicted with chronic illness is raising about20%.Third, moral hazard occurs after the enrolled peasants purchased commercial health insurance. The additional commercial health insurance raises the probability and the amount of any medical expenditure for the enrolled peasants.Fourth, insurer’s underwriting rejection subjected to risk selection occurs on the sale of commercial health insurance. The probability of acceptance by the insurer for the elder intention client is on the decrease. The peasants who fail to live independently are also discriminated by the insurer. The demand of commercial health insurance is not satisfied for a number of peasants.Fifth, the consumption of medical care will increase for the enrolled peasants who have been afflicted with chronic illness. The probability and the amount of any total medical expenditure and outpatient medical expenditures increase significantly.Sixth, the levels of education and income are the key factors that influence the demand of commercial health insurance for the peasants.The innovation that this dissertation makes is the follows:1. For the perspective, this dissertation breaks through the limitation that analyzes the decision of medical insurance and medical care separately. Meanwhile the analysis of the rural medical health insurance system is not limited to NRCMS.2. For the methods, this dissertation applies bivariate probit with partial observability model to investigate the key factors that influence the peasants’ purchasing commercial health insurance from the two angles of demand and supply. And two-part model, bivariate probit simultaneous equations and treatment effects model are used to assess the impact of commercial health insurance and chronic conditions’ on medical expenditures instead of a simple OLS model or LOLS form in the second part of two-part model.3. For the findings, the model of the consumer’s decision of medical insurance and medical care has the significance of innovation in theory. The results of empirical study offer the important decision-making basis for building the multi-level rural medical insurance system.