Household out-of-pocket medical expenditures and national health insurance in Taiwan: income and regional inequality

Data used in this study were drawn from the 1994 and 1996 Surveys of Family Income and Expenditure. We pooled the data from 1994 and 1996 and included a year dummy variable (NHI), equal to 1 if the household data came from 1996 in order to assess the impact of NHI on household out-of-pocket medical care expenditures shortly after its implementation in 1995.An individual who was older, female, married, unemployed, better educated, richer, head of a larger family household, or living in the central and eastern areas was more likely to have greater household out-of-pocket medical expenditures. NHI was found to have effectively reduced household out-of-pocket medical expenditures by 23.08%, particularly for more affluent households. With the implementation of NHI, lower and middle income quintiles had smaller decreases in out-of-pocket medical expenditure. NHI was also found to have reduced household out-of-pocket medical expenditures more for households in eastern Taiwan.Although NHI was established to create free medical care for all, further effort is needed to reduce the medical costs for certain disadvantaged groups, particularly the poor and aborigines, if equality is to be achieved.In 2000, Taiwan was ranked as the second healthiest country in the world, only behind Sweden [1]. While its economic growth, environmental sanitation, and health education have been contributing factors, its implementation of National Health Insurance (NHI) in 1995 is the most important key to its achievements in health. With the comprehensive medical benefit coverage provided to almost all people, NHI has notably increased the availability and accessibility of medical care services and has seen a significant increase in utilization of its medical healthcare services [2-5]. Starting with a national approval rate of 33% in 1995, NHI's approval rating rose to 75.4% in 2000 and to over 80% in 2001 [6].Although many studies examining whether NHI mitigates the inequality in health care util