Can Basic Medical Insurance Reduce Elderly Family Income Inequality in China?

Basic medical insurance is the critical medical security system to realize common prosperity in China. This study explores the impact of basic medical insurance on elderly family income inequality in China using the China Family Panel Studies (CFPS) data in 2018. Our finding shows that basic medical insurance is significantly negatively correlated with elderly family income inequality, indicating basic medical insurance has a positive impact on narrowing the elderly family income inequality. The heterogeneity analysis shows that basic medical insurance has a more significant reduction effect among the eastern elderly and the younger elderly family. The results also suggest that health performance significantly mediates the relationship between basic medical insurance and elderly family income inequality. This study implies that the Chinese government should increase the proportion of basic medical insurance reimbursement and expand the scope of reimbursement for basic medical insurance to realize income fairness among elderly families.