The effect of the universal two-child policy on medical insurance funds with a rapidly ageing population: evidence from China\u2019s urban and rural residents\u2019 medical insurance

Ying Luo,Xinjie Zhang,Jingru Huang

doi:10.1186/s12889-021-11367-7

Abstract

BackgroundWith the rapid growth of the ageing population, the operating burden of China’s basic medical insurance fund is becoming increasingly heavy. To counter rapid population ageing and ameliorate a series of problems, China has adjusted its fertility policies several times. On January 1, 2016, the universal two-child policy was implemented. This study analysed the impacts of the adjustment to the fertility policy and potential improvements in fertility intention on the insured population and medical insurance fund sustainability.MethodsWe used an actuarial science method and took the urban and rural residents’ basic medical insurance (URRBMI) of China, which covers most urban and rural residents, as an example to build a dynamic forecast model of population growth and a dynamic actuarial model of medical insurance funds.ResultsCompared with the original policy, under the current fertility intention (40%) with the universal two-child policy, the ageing of the population structure of URRBMI participants will decline significantly after 2026, and individuals aged 65 and over will account for only 19.01% of the total participants in 2050. The occurrence of the current deficit and accumulated deficit of the URRBMI fund will be postponed for one year to 2022 and 2028, respectively. If fertility intentions continue to rise, the ageing degree of the population structure will decrease, and the deficit would be further delayed.ConclusionsThe universal two-child policy is conducive to improving the degree of overall population ageing, delaying the occurrence of a URRBMI fund deficit, and improving the sustainability of URRBMI funds. If fertility intention increases, the effects would be stronger. However, since the adjustment of the universal two-child policy has a certain time lag, it will take time to demonstrate this impact. Therefore, while actively promoting the universal two-child policy, other measures should be taken, such as improving the fertility desire among couples of childbearing age and reforming medical insurance payment methods.

Highlights

With the rapid growth of the ageing population, the operating burden of China’s basic medical insurance fund is becoming increasingly heavy
A dynamic actuarial model of the urban and rural residents’ basic medical insurance (URRBMI) fund was established to evaluate the sustainability of URRBMI fund operation in the target period
Note: (a) Due to space limitations, this study only reports the simulation results of some years in the table, and the same applies below. (b) When the current balance or accumulated balance becomes negative, it means that the URRBMI fund has a current deficit or an accumulated deficit; that is, the fund has a payment risk Source: The author of this manuscript calculated the data based on the collected data and actuarial models the forecast period

Summary

Introduction

With the rapid growth of the ageing population, the operating burden of China’s basic medical insurance fund is becoming increasingly heavy. Along with the rapid ageing of the population, the medical needs of the elderly population are increasing [6]. In China, influenced by the continuous growth of medical needs of the elderly as the population ages and by the ongoing improvements of medical security level, the utilization rate of medical insurance funds and the risk of fund expenditure and depletion both continue to increase. With a rapidly ageing population, the growth rate of medical insurance fund expenditure is greater than that of medical insurance fund income [8] If this situation continues, the sustainability of medical insurance funds will be affected in the future [9]

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