Can National Health Insurance Programs Improve Health Outcomes?—Re-Examining the Case of the New Cooperative Medical Scheme in Rural China
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In 2003, China launched a new health insurance system - the New Cooperative Medicine
Scheme (NCMS) in its rural areas, where more than 87 percent of China’ rural residents were not
covered by any health insurance programs. By the end of 2009, the NCMS had expanded to
cover 95 percent of China’s rural residents. Previous research has yielded conflicting results
regarding the effects of the NCMS in rural China, but the conflicting results may be due to
estimation biases. This paper uses a triple-difference method, which takes into account rural
residents’ unobserved heterogeneity, to re-evaluate the impacts of the NCMS on rural residents’
health outcomes, including hypertension, diabetes, heart disease, apoplexy and born fracture.
Using a longitudinal sample drawn from the China Health and Nutrition Survey, our tripledifference
method indicates that the NCMS significantly reduces the incidence of diabetes, heart
disease, apoplexy for rural residents over age 55. Our results also suggest that the commonlyadopted
impact evaluation method, the double-difference method, is likely to underestimate the
health impacts of the NCMS.