THE EFFECT OF NATIONAL HEALTH INSURANCE ON MORTALITY AND THE SES-HEALTH GRADIENT: EVIDENCE FROM THE ELDERLY IN TAIWAN

Using the difference-in-difference-in-differences method, we examine the effect of the National Health Insurance (NHI) on mortality, self-assessed health, and functional limitations of the elderly and seek to determine whether the effect is spread equally across health classes. We find that the NHI only has an effect on the death hazard, and it is the least healthy who benefit the most. The death hazard falls by 1648% and 39% for the least health and the healthiest, respectively. The decline in the hazard ratio for the least healthy among the uninsured is 58% greater than that of their counterparts among the insured. Moreover, female participants benefit more from the NHI than male participants. We find no significant effect of the NHI in the SEShealth gradient except for the educationdeath hazard gradient. The gap in the education-death hazard gradient between the insured and previously uninsured is significantly reduced by 731% after 1995. The hazard ratio among the less-educated in the treatment group also falls by 55% relative to that in the comparison group. The NHI appears to have prolonged lives but has failed to improve the functional limitations, which might have contributed to the rapid increase in the demand for long-term caregivers in recent years. Copyright (c) 2012 John Wiley & Sons, Ltd.