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Life Satisfaction of Middle-Aged and Older Chinese: The Role of Health and Health Insurance

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Abstract

The Chinese government has launched a series of health reforms to establish universal health insurance coverage, particularly for vulnerable groups, including middle-aged and older adults. However, the current public health insurance system is highly fragmented, consisting of different programs with different levels of premiums and benefits. We analyse whether the universal health insurance system increases the life satisfaction of middle-aged and older Chinese people and to what extent the type of health insurance affects the life satisfaction of this group. Our study is based on data from the China Health and Retirement Longitudinal Study, a nationally representative longitudinal survey of Chinese aged 45 and above, in 2011, 2013, and 2015. We find that the life satisfaction of middle-aged and older adults does not depend on having any health insurance coverage but varies with the type of health insurance coverage, controlling for potential confounding variables such as health status, occupation, hukou status, and other demographic variables. Individuals covered by the most generous program, the Government Medical Insurance, reported a higher life satisfaction. In comparison, individuals covered by the Urban Employee Medical Insurance, the Urban Resident Medical Insurance, and the New Rural Cooperative Scheme reported a lower life satisfaction by 0.155, 0.106, and 0.112 standard deviations, respectively. Our results suggest that establishing a more equitable health insurance system should be the next step in health reforms in China.

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Notes

  1. Funding sources differ across health insurance types. The UEMI is funded by an 8% payroll contribution, of which 6% are paid by employers and 2% by employees. The URBMI receives 70% of its funding from the government subsidies and 30% from individual premiums. The NCMS is 80% is founded by government subsidies and 20% by individual premium The GMI is 100% founded by the government (World Bank 2010).

  2. The reimbursement rate of health insurance depends on the types of health insurance, the individual’s retirement status, the costs of medical services, and the tier of medical institutes. Here we describe the reimbursement level of first-tier medical institutes (e.g., county hospital). Please see details at https://beijing.chashebao.com/yiliao/12149.html.

  3. See Zhao et al. (2013) for details of the CHARLS survey design and sampling method.

  4. In this study, the terms ‘life satisfaction’, ‘happiness’, and ‘subjective wellbeing’ are used interchangeably, although differences in these concepts have been noticed (Diener 2006).

  5. Very few respondents reported to be completely satisfied (3.2%) or not at all satisfied (2.8%). We have therefore grouped the five possible responses into three categories.

  6. A few respondents reported being covered by multiple health insurance programs. For these respondents, we applied the questions of health insurance type in reimbursement of expenses in outpatient and inpatient services to double-check and identify their status of health insurance coverage.

  7. We note that some regions or provinces have started to merge the NCMS and the URBMI into the URRMI before 2015 (only 2% reported to be covered by the URRMI in our sample). Also, we note that the URBMI, URRMI and NCMS have been merged into one scheme in some regions since 2015 but many CHARLS respondents reported to be covered by URBMI (16.7%) and NCMS (67.9%). We used all available CHARLS data to verify the respondents’ health insurance type based on the health insurance scheme they report directly, and the health insurance types they report for use or plan to use in reimbursement after using medical services. Based on the CHARLS questionnaire, we cannot assess whether the respondents know that their health insurance scheme has been merged and whether they report their health insurance types correctly. Given that our main results show that the generous GMI is associated with higher life satisfaction, the integration of the less generous NCMS, URBMI and URRMI would not affect our main results.

  8. We group the responses to self-reported health status into two categories: poor health and other. Very few respondents reported having a very poor (4%) or very good health status (8%), while more than a half reported having a fair health status. We combined the answers “very poor health” and “poor health” into one category called “poor health”, and while “other” includes “very good”, “good” and “fair” health. We conducted robustness tests using three categories of self-reported health status in the model (poor health, fair health, good health), and the results are very similar to our main results in Table 4.

  9. There are slight differences in the questions related to difficulty of performing daily activities in the three waves of CHARLS. Hence, we only use those ADL and IADL questions that are available in all three waves.

  10. To better capture the effects of self-reported health status as a mediator, we use three categories of self-reported health status in the model: poor health status (24.2%), fair health status (52.7%) and good health status (23.1%). We apply an ordered fixed effects model in the first step of Table 6.

  11. Another potential mediator in this study is the utilisation of medical services (e.g., outpatient and inpatient services). However, middle-aged and older adults in CHARLS reported relatively low usage of medical services. 22.9% reported using outpatient services in the last month, while 14% reported inpatient services uses in the last year. We tested the relationship between utilisation of medical services and health insurance and found no significant correlation.

  12. We choose this age split because the official retirement age is 60 for males in the Employees’ Basic Pension and for males and females in the Residents’ Basic Pension and retirees are eligible to receive pensions after their retirement (The State Council of China 1978). Age 60 also gives a good sample split. 50% of the respondents in our sample are aged 60 and above.

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Acknowledgements

The authors acknowledge the financial support from the Australian Research Council Centre of Excellence in Population Ageing Research (CEPAR). We are grateful for comments received from John Piggott, Guy Mayraz, Jeromey Temple and Peter McDonald AM and from participants at the 5th Annual Workshop on Population Ageing and the Chinese Economy. The authors are responsible for all remaining errors.

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  1. ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW Sydney, Building L5, 223 Anzac Parade, Kensington, NSW, 2033, Australia

    Sisi Yang

  2. School of Risk and Actuarial Studies, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW Sydney, Kensington, NSW, 2033, Australia

    Katja Hanewald

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Yang, S., Hanewald, K. Life Satisfaction of Middle-Aged and Older Chinese: The Role of Health and Health Insurance. Soc Indic Res 160, 601–624 (2022). https://doi.org/10.1007/s11205-020-02390-z

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