The Impact of Individual Health Account Scheme on Lifetime Income Redistribution: Evidence from China

Guan Gong, Hongmei Wang, Lingli Xu

Research output: Contribution to journalArticle

Abstract

This paper investigates the effects of a combination of individual health accounts (IHAs) and catastrophic insurance on lifetime income redistribution by examining the variations in end-of-life IHA balances and lifetime out-of-pocket health expenditures. We exploit longitudinal health expenditure data from 2005 to 2007 in Kunshan City, Jiangsu Province of China. We find a high concentration of low IHA balances at the end of life, with most equal to zero. This finding suggests that most IHA balances are used for health expenditures and that the income redistribution effect through the accumulation of IHA balance is limited. However, the results also show a wide variation in lifetime out-of-pocket spending in the form of deductibles and coinsurance, which implies serious inequality in individual financial burden that can lead to a large income redistribution effect.

Original languageEnglish (US)
Pages (from-to)925-940
Number of pages16
JournalReview of Development Economics
Volume19
Issue number4
DOIs
Publication statusPublished - Jan 1 2015

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ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

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