Research Article: Health Insurance Coverage and Its Impact on Medical Cost: Observations from the Floating Population in China

Date Published: November 11, 2014

Publisher: Public Library of Science

Author(s): Yinjun Zhao, Bowei Kang, Yawen Liu, Yichong Li, Guoqing Shi, Tao Shen, Yong Jiang, Mei Zhang, Maigeng Zhou, Limin Wang, Guihong Zhang.


China has the world’s largest floating (migrant) population, which has characteristics largely different from the rest of the population. Our goal is to study health insurance coverage and its impact on medical cost for this population.

A telephone survey was conducted in 2012. 644 subjects were surveyed. Univariate and multivariate analysis were conducted on insurance coverage and medical cost.

82.2% of the surveyed subjects were covered by basic insurance at hometowns with hukou or at residences. Subjects’ characteristics including age, education, occupation, and presence of chronic diseases were associated with insurance coverage. After controlling for confounders, insurance coverage was not significantly associated with gross or out-of-pocket medical cost.

For the floating population, health insurance coverage needs to be improved. Policy interventions are needed so that health insurance can have a more effective protective effect on cost.

Partial Text

In the past three decades, China has experienced the largest human migration in history, leading to a dramatic rise in the urban population from 191 million in 1980 to 622 million in 2009 – an increase driven largely by rural-to-urban migration [1]. China enforces the “hukou” system, which is a household registration operated by the central government. Its record is issued per family and usually includes births, deaths, marriages, and moves of all members in the family. The hukou system is classified as urban hukou status and rural hukou status, and it is difficult for Chinese citizens to transit from rural hukou status into urban hukou status. China’s social welfare is closely tied to the status in hukou system [2]. The rural-to-urban migration coupled with the hukou system have created the unique floating population, which consists of those residing at their residences without hukou (which differ from their hometowns with hukou) for at least six months within a specific year. It is estimated that nearly 40% of the people living in the urban areas are floating population, leading to a total number of about 260 million [3]. In China, many social welfare and healthcare benefits are localized, i.e., only available to those with hukou at their current residences, making them inaccessible to the floating population [4], [5]. The floating population usually has low socioeconomic status and is less-advantaged. Their wellbeing has drawn significant recent attention from the government, social media, press and social and public health researchers [3]. This study focuses on health insurance and its impact on medical cost for the floating population.

Research on the floating population’s healthcare and health insurance is of significant importance. In this article, we report empirical observations made in a survey recently conducted on insurance coverage and medical cost. A great discrepancy of insurance coverage exists between the floating population and the general population. Demographic and personal characteristics are found as associated with insurance coverage. The findings may have important implications and can assist the development of intervention programs to further increase coverage and effect. The analysis of medical cost leads to two main observations. The first is that insurance coverage is not associated with gross and OOP medical costs. The second is the distinct associations with medical cost for the floating population. More detailed investigations are needed to fully understand the mechanisms underlying such associations. More effective strategies are needed to improve coverage depth and reduce financial burden caused by illness.