Eradicating Poverty and Unshackling from Illness Expense: The Impact of Targeted Poverty Alleviation Policy on Medical Burden

Health poverty alleviation is a crucial aspect of targeted poverty alleviation policy, with easing the medical burden being its primary goal. This study evaluates China's targeted poverty alleviation policy's impact on reducing the medical burden of impoverished households, using data from the China Health and Retirement Longitudinal Survey (CHARLS) for the years 2011, 2013, 2015, and 2018. Employing Difference-in-Differences (DID) methodology, this paper finds significant reductions in both the out-of-pocket to income ratio and catastrophic medical expenditure among targeted households. The policy's success is attributed to the "income effect", raising household income levels, and the "safety-net effect" increasing the reimbursement ratio for inpatient expenses. These results are valid across several robustness tests including propensity score matching (PSM-DID) and placebo test. The findings have implications for global health policy, suggesting that targeted poverty alleviation interventions can effectively alleviate medical burden and prevent poverty due to health expenses, offering a viable model for other developing countries facing similar challenges.