Study On The Reverse Selection Effect Of The Basic Medical Insurance Market For Urban Residents In China

Since the state council issued the Opinions of the State Council oin the Integration of the Basic Medical Insurance System for Urban and Rural Residents in January 2016,the integration of the basic medical insurance system for urban residents and the new rural insurance system has been carried out across the country.The basic medical insurance system is of great significance for maintaining residents' living standards and ensuring social stability.The classical adverse selection theory demonstrates that the higher risk individuals' willingness to insure will be more eager,because of the existence of adverse selection effect,there are many high risk policy-holder exists in our basic medical insurance market,and thus to a higher level of use of medical resources,therefore the long-term sustainable development of medical insurance fund will be diminished by certain negative limpact.This article uses the China Health and Retirement Longitudinal Survey(CHARLS)national baseline survey data in 2015,the article establishes the Probit model to identify the adverse selection effect on the market of insurance of basic medical treatment in our country and the influence of each variable for insurance behavior by discerning subjective risk and objective risk degree of the influence of the beforementioned indicators to policy-holder insurance behavior,and then the article further examines our URBMI market does face adverse selection problem by utilizing Bivariate Probit model.The research shows that the among the insured population of basic medical insurance for urban residents,the respondents with worse self-assessment risk showed higher willingness to insure,and also showed a higher level of utilization of medical services.Because of their self-confidence in their own health level,the policyholders with higher health level did not believe in the possibility of going into hospital,and thus showed a lower willingness to insure.Because of the existence of adverse selection effect,it shows that there are a certain number of high-risk policyholders in the basic medical insurance market for urban employees in China,which will result in a higher level of utilization of medical resources,and will inevitably have a negative impact on the long-term sustainable development of medical insurance funds.The issue of medical insurance is attracting more and more attention in China.It is of great practical significance to provide sustainable insurance protection for urban and rural residents in China in a long-term and effective way.This paper holds that in the process of developing URBMI,on the basis of adhering to voluntary participation,we can realize market liquidation by providing products corresponding to the insured's risk level,improve its coverage by properly raising the level of government subsidies,and realize the long period and sustainable operation of the social basic medical insurance system by strengthening the third-party supervision over the price of medical services.