Commercial Health Insurance, Catastrophic Medical Expenditures and Resident Income Inequality

Abstract

Objective: Commercial health insurance is an important link in both establishing a multi-layer social security system and as a means of facilitating social fairness and the distribution of wealth. This study evaluates the influence of commercial health insurance on resident income inequality and analyses its influencing mechanism from the perspective of catastrophic medical expenditures. Method: 7,404 research samples from the China General Social survey (CGSS) hybrid databases for the years 2015, 2017, and 2018 were analysed. The influence of commercial health insurance on resident income inequality and its mechanism of action were tested through an OLS regression model and mediating effect model. Results:Commercial health insurance inhibits resident income inequality significantly, especially for respondents below 60 years of age in rural areas and western China. Commercial health insurance was found to relieve resident income inequality by lowering the occurrence rate of catastrophic medical expenditures. Conclusions:The complementary advantages of government and market mechanisms should be developed fully to accelerate the coordinated development of basic medical insurance and commercial medical insurance. Moreover, considerations should be given to differences among groups. It is suggested that the public should be relieved of the financial burden of major and critical diseases, that the differences in residents’ income levels should be narrowed, and that the distribution of wealth should be facilitated.