Does Social Medical Insurance Achieve a Poverty Reduction Effect in China?

Abstract

This paper aims to explore the impact of social medical insurance (SMI) on poverty reduction (PR) in China. Considering the time-varying characteristics of factors, this paper uses the bootstrap Granger full sample causality and subsample rolling window model to find the relationship between SMI and PR. The results highlight that in some periods, there is a bidirectional causal link between SMI and PR. Influenced by the medical insurance reform and medication measures. Social medical insurance does not have a positive impact on poverty reduction in some periods. These results are supported by the Utility Maximization Model of Insurance Consumption, which highlights that individuals make utility maximization choices when choosing insurance. The effect of medical insurance on poverty alleviation depends on whether an individual's investment in medical insurance can maximize its utility. If the proportion of social medical insurance reimbursement is too low, individuals will give up buying social medical insurance. Thus, the anti-poverty effect of social medical insurance is difficult to achieve. Therefore, authorities need to pay attention to specific contexts and social medical insurance policies and further improve the social medical insurance system to promote the realization of the anti-poverty of social medical insurance.