Abstract
Public health insurance for China’s children is analyzed using an equity analysis framework and compared to US public health insurance for low-income children. Four dimensions of comparisons are addressed: fairness of financial support, equal treatment for equal need, equality of access to services, and equality of health outcomes. Secondary data from China and US government statistics were used for the comparisons. Recommendations to strengthen China’s health insurance for children include lower out-of-pocket expenses, standardized data collection and management, qualified nurse practitioners providing rural health care, and explicit coverage requirements.
Keywords
Due to persistent health care and health insurance problems, China established a new public health insurance system in the early 2000s. Although this new system is composed of four main insurance programs, children may be covered by one of two programs: the Urban Resident Basic Medical Insurance Program (URBMIP) or the Rural New Cooperative Medical Insurance Program (RNCMIP). These programs have been in effect for approximately a decade, yet few analyses concerning children’s health care provision have been conducted.
This article seeks to fill this gap by analyzing how China’s new health insurance system impacts children’s health and health care provision through an equity perspective that provides social workers with a moral basis. Historically, social equity was never a main emphasis in China. Therefore social work practice and research struggle with the current policies. This analysis will make a contribution to China’s policy discussion as well as to the development of social work research in Chinese society. The key health issues that children in China are facing and the recent historical development of the current health insurance system are briefly discussed to set the stage for this analysis. The child-serving components of URBMIP and RNCMIP are discussed in detail and analyzed using an equity analysis framework which examines four dimensions of equity – fairness of financial support, equal treatments for equal need, equality of access to services, and equality of health outcomes. To inform further children’s health insurance development in China, the framework is then applied to compare key elements of these two programs with the two US public health insurance policies that cover low-income American children: Medicaid and the Children’s Health Insurance Program (CHIP). We conclude with recommendations to strengthen Chinese children’s health insurance policy.
Background
In 1979, the Chinese government implemented the ‘one-child policy’ to control the country’s high population growth and to enhance long-term economic development and living standards. This has resulted in a rapidly decreasing proportion of children under age 18. In 2010, 21 percent of the population was under age 18 (Wang, Shang, et al., 2011); by 2050, China’s child population is expected to be smaller than all other age strata, except those over 80 (Morgan and Kunkel, 2011).
Children are seen as a precious human resource contributing towards China’s future. However, the growing problems of a large uninsured population and health care cost inflation have resulted in a large percentage of uninsured children causing a negative impact in the children’s health (Shi and Singh, 2011). The end of the planning economic system led to the end of the national public health insurance system in the 1980s. This resulted in a large population without access to health insurance. The 29 percent of the Chinese population uninsured in 1981 jumped to 79 percent by 1993 (World Bank, 1997).
By this time, an urban–rural divide in children’s health had emerged. While 18.99 percent of urban residents were uninsured in 1993, 81.01 percent of rural residents were uninsured at this time (World Bank, 1997). Although governmental data were not available, it could be estimated that a large majority of Chinese children were likely rural residents, given the rural residence of 70 percent of China’s population at this time. Furthermore, differences in child health outcomes, such as malnutrition and infant mortality, emerged. Rural malnutrition increased during the 1980s and 1990s, while urban malnutrition declined sharply (World Bank, 1997). China’s infant mortality rate stopped its prior decline between 1982 and 1992, primarily due to rural areas.
In the 1990s, the Chinese government sought to partially resolve such concerns by permitting commercial insurance companies to provide insurance products to its citizens. However, ‘China had no reliable health care expenditure profiles and actuarial statistics to support a successful commercial health insurance operation’ (Preker et al., 2010: 270). To reduce their financial risk, most commercial insurance companies packaged health insurance as a supplement to life insurance, requiring health insurance recipients to buy life insurance first. Additionally, health insurance renewals were denied if a major claim had been reimbursed during the prior year (Preker et al., 2010). Accordingly, insurance coverage and adequate benefits remained out of the reach of many Chinese citizens, especially children.
As health insurance and health care problems persisted, China began to establish a new public health care insurance system in the 2000s to reduce financial barriers to access and disparities in health care (Ma et al., 2008). The government-funded system includes four main schemes: Medical Assistance (MA), Urban Employee Basic Medical Insurance (UEBMI), Urban Resident Basic Medical Insurance (URBMI) and Rural New Cooperative Medical Insurance (RNCMI) (World Bank, 2011). URBMI or RNCMI covers children who are identified as independent individuals without any income; MA and UEBMI do no cover children. Enrollment eligibility is tightly related to a child’s ‘HuKou’. 1 In most regions, children with urban HuKou enroll in URBMI. Children with rural HuKou enroll in RNCMI.
Equity analysis framework
Health equity is defined as ‘the absence of systemic disparities in health (or in major social determinants of health) between social groups who have different levels of underlying social advantage/disadvantage’ (Bravemen and Gruskin, 2003: 254). Health equity has often been characterized as a fundamental human right (Braveman, 2003, 2010; Braveman and Gurskin, 2003; Sen, 2002). As such, governments are responsible for the prevention, treatment and control of diseases, as well as the creation of conditions to ensure access to health facilities and the goods and services required to be healthy (Braveman, 2010; Braveman and Gurksin, 2003).
Although one of the ultimate goals of China’s new health reform is to reduce the disparities in health care, the policy-makers considered ‘equality’ much more than ‘equity’. All children are treated as equally as possible without considering their affordability and needs. In order to cover as many children as possible, benefits are designed at a low level. Resources are spread out for the entire child population, rather than concentrating on children who have higher health needs. An ‘equality’ focus policy does not contribute to reducing the disparities and helping the vulnerable population. This study uses an Equity Framework to analyze and explain the current phenomenon in China’s public health care system.
Four dimensions of health equity, including the fairness of financial support, equal treatment for equal need, equality of access to services, and equality of health outcomes, are particularly relevant to the health care needs of children in China (see Figure 1). The degree to which financial support for health insurance is equitable across the country is an important consideration. Various definitions of equity focus on such financial questions as whether health care should be allocated to favor the poor, whether health care payments should be directly linked to one’s ability to pay, or whether those who have equal ability to pay should make equal payments, regardless of factors such as gender, marital status, and place of residence (Wagstaff et al., 1989). Given the history of urban–rural health care disparities, the degree to which this new system assists in promoting equal treatment for equal need among diverse populations also seems crucial. These disparities point to the need to examine both whether children across the country have similar access to health services and whether they present similar health outcomes (Culyer and Wagstaff, 1993).

Framework for analyzing children’s health care equity.
Analyzing current children’s health insurance policy
Despite increased governmental support for children’s health insurance over the past decade, there are still some gaps in the system due to the different implementations found across China’s urban and rural regions. Through application of the equity framework to an analysis of the URBMI and the RNCMI systems, substantial differences in government financing of health insurance, treatment, access to health services, and health outcomes emerge.
Financial support
How – and the degree to which – the central government, provincial governments, and city and county governments provide financial support to the URBMI program differs across the country, resulting in widely divergent governmental support for health insurance (see Table 1). For example, while local governments finance 229 RMB 2 per person per year in Xiamen (Fujian Province), with no central government contribution, government financing in Jilin (Jilin Province) totals 70 RMB per person per year, with a 20 RMB central government contribution.
2009 financing for the URBMIP in nine cities (RMB/person/year) a .
Governmental support is lower for those insured under the RNCMI. The central government only contributes to RNCMI in some poor central and western provinces. In these provinces, both the central and local governments separately contribute 20 RMB per enrollee per year. In a 2005 sample of 189 counties from 17 provinces, the total RNCMI budget averaged 62.9 RMB per person per year, although this number varies based on local income and degree of coverage (Wagstaff et al., 2007).
Equal treatment for equal need
Table 2 demonstrates core elements of medical insurance coverage for both the URBMI and the RNCMI. In both systems, there are clear coverage disparities, for example, half of the regions do not provide outpatient treatment coverage. Disparities also are evident between the URBMI and the RNCMI; while half of the urban regions insure children in the case of emergency treatment, most rural regions do not. Due to limited funding, RNCMI may not cover or only partially cover many services, including outpatient care (Wang et al., 2007).
URBMI and RNCMI medical coverage (RMB/person/year) a .
Unfortunately, specific geographic coverage data are unavailable for the RNCMI, both because of limited data availability and the broad degree of implementation variation within regions. URBMI insurance benefits across nine cities are illustrated in Table 3. The reimbursement rate for children’s inpatient care in Xining (Qinghai Province) is 40–60 percent, while 65–90 percent is reimbursed in Chengdu (Hebei Province). Similarly, inpatient care coverage is limited to 25,000 RMB in Urumqi (Xinjiang Province), but is as high as 100,000 RMB in Shaoxing (Zhejiang Province). In Baotou (Inner Mongolia) and Changde (Hunan Province), the inpatient deductible ranges from 100 to 600 RMB depending on the type of medical institution; in Xiamen, deductibles range from 255 to 1277 RMB. Only Baotou, Changde and Jilin provide emergency outpatient coverage.
2009 children’s coverage under URBMI in nine cities (RMB/person/year) a .
Tertiary, secondary, primary and community medical institutions.
Province-level, city-level, and community-level medical institutions.
Tertiary, secondary, primary medical institutions.
Even when services are covered, rural children may be less likely than urban children to get necessary or appropriate treatment for their medical needs. This occurs because rural doctors tend to have limited access to professional training from formal medical universities. However, while programs covering well-baby and well-child regular check-ups have been widely implemented in developed countries, these programs have been excluded in both urban and rural areas of China. It has been found that these specific check-ups are essential in health care assessment and prevention at early stages of a child’s life, thus the emphasis placed on them in developed countries (American Academy of Pediatrics, 2001). This demonstrates a crucial gap in treatment for the children in both areas of China.
Access to services
In late 2005, the Chinese Ministry of Health and the World Bank found that the RNCMI ‘seems to have benefited rural residents by reducing the number of people who go without care when they need it, but did not apparently lead to any significant reduction in their overall out-of-pocket expenditures’ (Wagstaff et al., 2009: 35). Official Chinese statistics only calculate the overall costs associated with URBMI and RNCMI, but exclude the costs associated with children’s medical care in general or per person costs. However, the substantial out-of-pocket fees for children’s health care (see Table 2) raise questions about health care accessibility for both urban and rural residents. On average, enrollees must pay an inpatient care deductible and an average of 55 percent out-of-pocket for inpatient care, outpatient care, and emergency treatment. During the first six months of 2011, the average inpatient service cost per person was 7101.8 RMB, and the average inpatient medicine cost was 3033.6 RMB (China News, 2011). Based on the average 55 percent out-of-pocket payment, individuals paid an estimated 3905.99 RMB for inpatient services and 1668.48 RMB for inpatient medicine. These amounts reflect a disproportionately high percentage of the 18,858.09 RMB average gross annual income for urban residents and the 7115.57 RMB average gross annual income for rural residents (National Bureau of Statistics, 2010).
Out-of pocket expenses likely pose a substantial barrier to low-income child enrollees of the two programs. The ‘extremely poor’ constitute 10 percent of Chinese residents, with an average gross annual income of 4935.81 RMB in urban areas and 3151.62 RMB in rural areas. Another 10 percent are ‘low income’, with an average gross annual income of 8956.81 RMB in urban areas and 4431.38 RMB in rural areas (National Bureau of Statistics, 2010). For these residents, health care may be practically inaccessible, thus deepening gaps between rich and poor. Accordingly, enrollment coverage may not be a meaningful indicator of health care access in China.
Health outcomes for children
Substantial child health disparities also exist, especially between rural and urban areas. Unevenness in government financial support for health care, coverage, and access to services is reflected through an examination of children’s health outcomes. For children under five, death rates range from 64 per 1000 in poor rural areas to 10 per 1000 in large cities (Tang et al., 2008). While China’s urban infants rarely die from severe infection, it is still considered the third leading cause of rural neonatal mortality (UNICEF, 2008). While almost zero percent of children in the wealthy areas of Beijing and Shanghai were underweight in 2008, on average in the rest of China 6 percent of children are underweight. Nationally, 9.3 percent of rural children are underweight, compared to 3.1 percent of urban residents (Tang et al., 2008). In terms of child malnutrition, at least three times more child stunting exists in rural areas (17.3%) than in urban areas (4.9%) (Tang et al., 2008).
Comparing Chinese and US health policy
Like China, the United States has two primary government policies addressing children’s health insurance and care. However, unlike China, private insurance typically covers children in middle and upper income families, while the governmental programs – Medicaid and Children’s Health Insurance Program (CHIP) – are concerned primarily with the provision of health insurance and health care for low-income children. According to the report of WHO and the official website of HHS, China and American systems work in different ways (Table 4). China’s strategy is geared towards focusing on ‘health for all’ with the overall objectives of reducing barriers to access and reducing health disparities, and on ‘disease treatment’ rather than ‘preventive services’ (Ma et al., 2008; Wagstaff et al., 2009). On the contrary, CHIP and Medicaid seek to provide ‘patient-centered’, ‘preventive’ and ‘equitable’ health care to all enrollees (US HHS, 2011).
Public health insurance for children: China and the United States compared.
Sources: Wachino et al. (2004); US HHS (2011); Barber and Yao (2010).
Financial support
In China, multiple levels of government contribute funds to public health insurance; however, in the US the funding split between state and federal governments is more consistent. Prior to full implementation of the Patient Protection and Affordable Care Act (PPACA), the US government funded 50–74.73 percent of Medicaid services, while states fund the remaining costs (US Department of Health and Human Services, 2011). The federal share of Medicaid funding available to states has risen under PPACA. Historically, minimum income guidelines for Medicaid qualification were set by the federal government, but could be increased by states. Prior to PPACA, all children from birth to age six with family incomes below 100 percent of the FPL were eligible for Medicaid. Under PPACA, states have the option of the expanding Medicaid to all children and adults below 133 percent of the Federal Poverty Level (CMS, 2012). States have substantially been more flexible in designing CHIP programs. CHIP programs may be distinct from Medicaid, or may be treated as an expansion of Medicaid. Thus states vary substantially in coverage of children at higher income levels. Upper limits range from below 200 percent of the FPL in Idaho and North Dakota to at or above 300 percent of the FPL in 19 states (CMS, 2012).
Equal treatment for equal need
Health disparities also exist in the US; however, federal policy and data systems have been established to reduce coverage disparities by standardizing children’s health care provision. While treatment for some services differs by state, the federal government requires a core set of inpatient and outpatient services to be covered by the same degree across the country. Furthermore, the Center for Medicare & Medicaid Services (CMS) requires states to conduct an External Quality Review of Medicaid and CHIP, collecting and examining data on quality, timeliness, and service access (CMS, 2012). Under the Children’s Health Insurance Program Reauthorization Act (CHIPRA, P.L. 111-3), states are encouraged to report on Medicaid and CHIP pediatric care quality, as well as efforts to improve this care. States and the federal government share costs associated with developing data systems that report child health measures. CHIPRA has strengthened public information regarding child enrollment and care under Medicaid and CHIP (US Senate, 2009). This contrasts starkly with China’s lack of effective data collection and data management, and therefore lack of oversight of equity in treatment.
Access to services
The US government requires states to report their Medicaid and CHIP data in order to monitor equitable access to services. For example, states must report data on the numbers of children receiving well-child checkups and referrals for treatment services based on well-child checkups (Iritani, 2011). Furthermore, the US government establishes specific Medicaid guidelines to which states must adhere. While states can require that certain enrollee groups pay enrollment fees, premiums, deductibles, coinsurance, copayments, and cost-sharing, the federal government forbids cost-sharing for children under age 18 (MACPAC, 2011). Regardless of state or region of residence, child Medicaid recipients pay minimal, if any, out of pocket medical expenses for covered services.
With CHIP, states have more flexibility to design benefit packages and corresponding cost-sharing arrangements. States that treat CHIP as an expansion of Medicaid must adhere to Medicaid benefits requirements and cost-sharing limitations, entitling children to mandatory services without cost-sharing (MACPAC, 2011). States that implement CHIP as a separate program may incorporate cost-sharing; however, federal law limits out-of-pocket payments to not exceed 5 percent of family income and prohibits cost-sharing for preventive or pregnancy-related services. Cost-sharing is further limited for children with family income below 150 percent FPL.
Compared to the average 30 percent cost-sharing for children in China’s health insurance programs, out-of-pocket expenses for low-income children enrolled in Medicaid and CHIP appear substantially more accessible. The cost-sharing limits the US children’s health programs do not only apply to inpatient care, but also to outpatient care and regular check-ups, which are minimally covered, if at all, in China. Although the effectiveness of preventive services is difficult to measure, the US policies appear to see preventive services significantly linked to child development. Thus, unlike in China, cost-sharing is prohibited in the US for well-baby and well-child regular check-ups and immunizations.
Even though the percentage of US children with access to health insurance and associated health services has consistently increased since the institution of the CHIP program, the barriers to access still exist. While 13.9 percent of US children under 18 were uninsured in 1997, just 7.8 percent (5.8 million) were uninsured in 2010. Similarly, the percentage of children under 18 with public health insurance increased from 21.4 percent in 1997 to 39.8 percent in 2010 (NCHS, 2011).
Health outcomes for children
The Chinese government does not collect or manage children’s health care data, meaning that few children’s health outcomes are tracked and minimal public attention is given to children’s health outcomes. The US government, in contrast, emphasizes data collection and documentation that reflect a concern for strengthening early childhood health outcomes. Despite this data tracking and increasing access to health insurance and care, disparities in US children’s health outcomes are prevalent by race, ethnicity, and geography. Infant mortality is just one example, with large differences across racial and ethnic groups. Infant mortality rates exceed the US average for non-Hispanic African Americans, Puerto Ricans, American Indians and Alaskan Natives (MacDorman and Mathews, 2008). The infant mortality rate for US infants born to African American women (13.63 per 1000 live births in 2005) far exceeds that of other ethnic groups. China’s overall infant mortality is higher at 14.9 per 1000 in 2008; however, the Chinese urban infant mortality rate is below the US national average, at 6.5 per 1000 (MacDorman and Mathews, 2008; UNICEF, 2010).
Recommendations
Although neither country provides a fully equitable children’s health insurance system, the US programs for low-income children have put processes into place to move towards health equity. The Chinese programs, in contrast, appear to further reinforce societal inequities, both between rural and urban areas and between wealthier and poorer residents. Based on this equity analysis of China’s children’s health insurance policy and corresponding elements of US children’s health policy, four recommendations are proposed to strengthen children’s health insurance and care in China.
First, the URBMIP and RNCMIP should tie out-of-pocket payments, including cost-sharing, deductibles, and coverage limits, to family economic status, as is the case with Medicaid and CHIP. Currently, out-of-pocket payments are determined by a regional standard, without taking into account each individual’s family income. Essentially, families who can afford higher cost-sharing and deductibles receive health care, while families unable to afford out-of-pocket costs may have to forgo health care. While China does not have an official uniform poverty level like the US, regions can design more explicit eligibility levels for children according to their economic situation. A scaled system of cost-sharing that increases by income could enable families who cannot afford high cost-sharing and deductibles to be able to access care for their children.
Second, as demonstrated by the CMS reporting standards for Medicaid and CHIP, a standardized data collection and management system could enable the central government to control the development of URBMIP and RNCMIP and to monitor quality across provinces. Universal insurance without assessing health care affordability and quality may continue to exacerbate existing widespread health disparities in China. Data collection also can lay the groundwork for future research and analysis to strengthen health care in China.
Third, given the lack of formally trained rural doctors, qualified nurse practitioners should be trained to provide qualified primary health care services for rural children, including well-baby and well-child check-ups. Chinese public health policies should aim to erase, rather than contribute to, rural–urban disparities otherwise these disparities can threaten the social security and harmony of China’s entire society.
Finally, as with Medicaid, the Chinese national government should consider requiring similar coverage of a core set of child inpatient and outpatient services across the URBMIP and RNCMIP schemes. In particular, explicit coverage should be provided for regular well-baby and well-child check-ups. This has substantial implications both for access to services for diverse resident populations and for the equality of health outcomes across the nation. Regular check-ups for children and pregnant women are crucial to prevent maternal, child, and neonatal deaths, especially in rural areas.
Conclusion
China’s medical insurance system reflects a goal of easing citizen’s fears and anxiety around high medical costs for disease treatment. The rapid growth of coverage in the last decade may help the public feel more secure; however, this analysis demonstrates that equitable access to health care is not being successfully provided across the nation. Minimal benefits, inconsistent implementation strategies, and lack of essential care coverage ultimately can worsen the quality of care and exacerbate existing disparities.
Under current policy, children in rural areas are less likely to access health care, especially quality health care, even though they are more likely to suffer from malnutrition and poor living conditions. To promote children’s health care and to reduce nationwide disparities, this analysis recommends future attention to strengthening China’s children’s health insurance and care provision through establishing data collection and management systems, reducing out-of-pocket expenses, increasing access for qualified nurse practitioners to provide rural health care, and explicit coverage requirements, including regular well-baby and well-child check-ups.
Footnotes
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.
