The Research Of The Information Asymmetry In The Basic Medical Insurance Market For The Elderly

In order to fully achieve the goal of a well-off society and meet the basic medical needs of urban and rural residents, China has established a basic medical insurance system which is constituted by the basic medical insurance for urban workers, the basic medical insurance for urban residents and the new rural cooperative medical insurance. By the end of 2012, the number of the people participating in the social basic medical insurance system had reached 1.341 billion. The participation rate had also reached 99.1%, which indicated the goal of "universal health care" had been achieved at the institutional level. The basic medical insurance system has been playing an important role in relieving the problem of "back to poverty by illness or poverty caused by illness’and has been a main way to meet the health and medical demand for the elderly so far. However, China has been old before getting rich and become an aging society. The intensification of the aging process, the features of the elderly and the information asymmetry problem all have serious effect on the protection role of the basic insurance system. Among all the factors influencing the basic medical insurance system, the information asymmetry can lead to adverse selection and moral hazard, which will cause huge medical expenses and threaten the sustainability of the basic medical insurance system. So studying the adverse selection and moral hazard problems in the basic medical insurance market for the elderly has important practical significance.The paper is based on the information asymmetry theory and it makes good use of literature research method and the theoretical and empirical research method. In the first part, it introduces the background and the significance of the paper, then it reviews domestic and foreign literature on the problem of the information asymmetry in the basic medical insurance for the elderly, and gives the research ideas and the structural arrangements of the paper. The second part of the paper starts from the definition of the relevant concepts and then provides then theoretical basis for further research by introducing the concepts and features of the basic medical insurance market and explaining the causes and the performances of the information asymmetry problem. The third part analyzes the aging process of China and the development status of the basic medical insurance market for the elderly, then points out those problems existing in the basic medical insurance market and analyzes the corresponding reasons. The fourth part uses the 2011 Chinese Longitudinal Health Longevity Survey (CLHLS) data to empirically test the adverse selection and moral hazard problems in the basic medical insurance market for the elderly. The main conclusions are as follows:firstly, basic health insurance caused the medical spending to significantly increase; secondly, the elderly who have worse health status are more likely to enroll in basic health insurance than those with better health status, which proves the existence of adverse selection of the elderly; besides, basic health insurance doesn’t have significant effect on smoking and drinking behaviors of the elderly, but the possibility of participating in physical activities decreases significantly and that proves the existence of moral hazard in basic health insurance. In the last part, the paper gives some practical suggestions to help overcome the adverse selection and moral hazard problems in the basic medical insurance market for the elderly and ensure their medical needs and promote the health of the elderly. These suggestions include strengthening the construction of the basic medical insurance system, implementing "lemon pricing" to overcome adverse selection and designing a incentive-compatible system.