The power of healthcare reform: the effect of cross-provincial direct settlement on poverty among rural older adults in China

The implementation of the policy of direct settlement of cross-provincial medical expenses in China has effectively improved access to medical care for vulnerable migrant groups. Using data from the 2012–2022 China Family Panel Studies (CFPS), this research applies a generalized Difference-in-Differences (DID) model to examine the impact of the policy on poverty among rural older adults, with Propensity Score Matching–Difference-in-Differences (PSM-DID) used as a robustness check. The results suggest that the implementation of the policy has effectively reduced poverty incidence, narrowed the poverty gap, and alleviated subjective poverty among rural older adults. Furthermore, the policy reduces the poverty risk of rural older adults through the mechanisms of consumption upgrading and income upgrading. The poverty-reduction effects are more pronounced among rural older men, those with surviving children, those with lower education levels, and those living in coastal areas. Further analyses show that the policy also reduces the financial support burden on adult children and older adults’ perceived multidimensional inequality, improves older adults’ health, and produces significant poverty-reduction effects among both non-migrant older adults who remain in their local communities and those who have migrated. This study complements the existing literature on the poverty-reduction effects of health care reform.