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

BACKGROUND: With 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. METHODS: We 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. RESULTS: Compared 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. CONCLUSIONS: The 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.