The effects of economic reform on health insurance and the financial burden for urban workers in China

Since 1980, Chinese enterprises have been undergoing reforms in employment practice, taxation, and workers' health/welfare benefits coverage. In parti cular, Chinese businesses have been facing a major challenge with respect t o the financial burden of providing medical benefits to their workers. The purpose of this paper is to analyse the impact of enterprise reform on work ers' health care benefits and their financial burden due to medical expense s. This study is based on a 1992 survey conducted in 22 cities, and included 4 06 enterprises and 5920 workers. It was found that there were wide variatio ns of coverage for health care benefits among urban Chinese workers. It was also found that workers with partial coverage were as likely to incur out- of-pocket medical expenditures as workers without coverage. These out-of-po cket medical expenditures could reach as high as 25% of a worker's annual i ncome. Policy recommendations are discussed at the end of the paper. Copyri ght (C) 1999 John Wiley gi Sons, Ltd.