The Impact Of Critical Illness Insurance On Catastrophic Health Expenditure

The social security system has been continually advanced,leading to the realization of comprehensive medical insurance coverage.However,our medical security level is still not high.To ensure the medical rights and interests of both urban and rural inhabitants are safeguarded more effectively,China,in 2012,initiated a campaign to bolster serious illness insurance,with the aim of creating a multifaceted medical security system.Significantly lessening the medical costs of seriously ill patients due to the introduction of serious illness insurance has been achieved;however,rural areas and low-income populations still experience a considerable amount of catastrophic health expenditure.Consequently,the effect of China’s serious illness insurance system on catastrophic health expenditure must be further examined and deliberated.Exploring the implementation effect of serious illness insurance policy,this paper opts for catastrophic health expenditure as its starting point,with both theoretical and practical value.This paper offers a practical analysis of the implementation of serious illness insurance policies and the current catastrophic health expenditure in various regions,based on a theoretical foundation of welfare economics,quasi-public goods,social equity,and the effect of critical illness insurance on catastrophic health expenditure.By employing the balance panel of Shandong Province from 2012 to 2018 to investigate if critical illness insurance had a considerable effect on catastrophic health expenditure,using the Logit fixed-effect model empirically examined.Residents of varying incomes,both urban and rural,were grouped to examine the disparities in effect.According to theoretical analysis,serious illness insurance is a guarantee mechanism to make economic compensation for the high medical expenses of patients with serious and serious diseases.The World Health Organization(WHO)has set a standard of 40 percent for catastrophic health expenditures,which are considered catastrophic when residents pay more than they can afford due to the impact of a disease.The main factors influencing catastrophic health expenditures include age,family health status,family structure,urban and rural attributes,and income level.The "income compensation effect" and "consumption promotion effect" are the two divisions of the influence critical illness insurance has on catastrophic health expenditure,with the ultimate outcome being contingent upon the equilibrium between them.Analysis of practice has revealed that since the introduction of the serious illness insurance system,the majority of people have been insured and the rate of coverage has grown annually.The weight of medical costs for those suffering from serious illnesses is significantly lessened.However,the serious illness insurance system has some problems,such as high reimbursement line,low reimbursement ratio and ceiling line,unstable source of funds,and commercial insurance not playing a professional role.The incidence of catastrophic health expenditure has been decreasing year by year,but the incidence of catastrophic health expenditure in rural areas and low-income groups is relatively high.At the confidence level of 5% a significant and negative correlation between the average family insurance participation rate and catastrophic health expenditure is demonstrated by the empirical results.When the family critical illness insurance participation rate increases by 1%,the probability of catastrophic health expenditure decreases by 0.002%.However,in terms of the degree of impact,the effect of increasing the critical illness insurance participation rate on reducing the risk of catastrophic health expenditure is not obvious.A significant disparity in the effect of critical illness insurance on diminishing catastrophic health expenditure is revealed by the heterogeneity analysis between urban and rural areas.The effect on rural households is not obvious,but it can effectively reduce the incidence of catastrophic expenditure in urban households.There are also significant income differences in the impact of critical illness insurance on reducing catastrophic health expenditure.Insurance for serious illness has a considerable impact on lessening the occurrence of catastrophic health costs in lower-income households,yet it has no noteworthy effect on middle and upper-income families.Based on the analysis above,this paper deems it essential to set distinct minimum payment requirements for urban and rural citizens,as well as different income groups,reduce the reimbursement range and compensation limit of serious illness insurance,broaden the financing pathways of serious illness insurance to guarantee its longevity,enhance the professionalism of serious illness insurance operations,optimize the distribution of medical resources and enhance the standard of basic medical services.