Constructing a Basefile for Simulating Kunming’s Medical Insurance Scheme of Urban Employees

Focusing on China’s medical insurance scheme which covers all employers and employees in urban areas, this research aims to assess the distributional impacts of medical insurance policies and to predict medical expenses by using microsimulation techniques. As an important part of the project, this article provides a brief overview of China’s medical insurance reform of urban employees and detail the techniques and processes to construct a basefile in 2005 for projecting the medical expenditures for urban employees over the period of 2006-2010. The main data used are administrative medical records of medical insurance participants provided by the Bureau of Labour and Social Security of Kunming, Yunnan Province. Along with the initial analysis for the raw datasets and age processing and adjustment for the individual records, monthly income information was imputed and personal savings accounts were established for each individual record. Important modelling parameters such as death rates and income adjustment factors were constructed. Furthermore, this article identifies medical insurance for government officials by using the combination of logarithm curve fitting and binary discriminant analysis. Based on this basefile, a static microsimulation model can be built to assess the implementation effects of the medical insurance policy and analyse the impact of the medical insurance scheme on urban employees.Urban medical insurance, China, microsimulation, basefile, Policy Research