Can supplementary private health insurance reduce poverty vulnerability? Evidence from Shandong Province

Abstract

Background: Despite achieving near-universal social health insurance coverage, some Chinese continue to grapple with issues of poverty vulnerability. Supplementary private health insurance (SPHI) serves as a crucial complement to the social health insurance system. This study aimed to investigate its efficacy in mitigating poverty vulnerability. Methods: Cross-sectional data of 18,426 representative samples were obtained from the Sixth National Health Service Survey (Shandong) conducted in 2018. A three-stage feasible generalised least squares estimation procedure was employed to estimate poverty vulnerability. Additionally, we explored the impact of SPHI on poverty vulnerability using the propensity score matching (PSM) method to balance treatment and control groups along observable dimensions. To address the potential endogeneity issues, we used the instrumental variable (IV) estimation approach to determine how SPHI affects poverty vulnerability. Results: We found that SPHI reduced the probability of poverty vulnerability for individuals enrolled in social health insurance. Furthermore, SPHI had a more pronounced protective effect on respondents with chronic diseases, those aged over 60 years, and those living in urban areas or western Shandong. Conclusions: The results imply that supplementary SPHI can be effective in poverty reduction even among populations with basic health insurance. Therefore, we encourage governments in other low- and middle-income countries to consider implementing supplementary SPHI for vulnerable people to reduce medical impoverishment.