The Impact of the “Inclusion of Rehabilitation Services in Basic Medical Insurance” Policy on the Utilization of Rehabilitation Services and Household Healthcare Expenditure Among Older Adults with Disabilities: Evidence from China

Background: The intersection of aging and disability is an important social issue. The rehabilitation system of older adults with disabilities is a complex social system including various social units. This study aims to investigate the impact of the “inclusion of rehabilitation services in basic medical insurance” (IRSMI) policy on the utilization of rehabilitation services and annual household healthcare expenditure among older adults with disabilities. Methods: Using the data of China Disabled Persons’ Condition Monitoring Survey (2009–2012), this study employed the difference-in-differences method to analyze the impact of IRSMI on rehabilitation services utilization and household healthcare expenditure, and further examined the differential effects of the policy on service utilization across subpopulations with different demographic characteristics, including gender, age, and disability severity. The Heckman two-stage model corrects for sample selection bias caused by the share of households with zero health expenditures. Event-study specification was applied to assess the validity of the parallel trends assumption in the DID framework. Baron & Kenny’s three-step method was used to explore the potential mediating mechanism. Results: (1) IRSMI significantly increased the likelihood of utilizing rehabilitation services among older adults with disabilities (OR = 1.349), but this kind of promotive effect mainly focus on males (OR = 1.530), middle-aged and older disabled individuals (OR = 1.423), and those with mild disabilities (OR = 1.444). (2) The implementation of IRSMI contributed to an approximately 20.3% increase in annual healthcare expenditures for households with older adults with disabilities (β = 0.185). (3) IRSMI significantly promoted the increase in household healthcare expenditures for high-income older adults with disabilities (β = 0.181), but had limited impact on low- and middle-income groups. (4) Rehabilitation services utilization played a mediating role in the relationship between IRSMI and household healthcare expenditure, with about 19.0% of the increase in annual household healthcare expenditures attributable to the enhanced utilization of rehabilitation services. Conclusions: In the complex social system of rehabilitation for older adults with disabilities, the IRSMI policy significantly increases the likelihood of rehabilitation services utilization and substantially raises annual household healthcare expenditures. However, the heterogeneous effects across gender, age, disability severity, and income levels reflect structural inequities embedded in the rehabilitation system, underscoring the need for adaptive and equity-oriented interventions.