The effect of air pollution on catastrophic health expenditure among middle-aged and older adults in China

Background: Catastrophic health expenditure (CHE) reflects the financial protection level towards the universal health coverage target. Air pollution is a major contributor to the economic burden of diseases. However, the relationship between air pollution and CHE remains largely unexplored. This study aims to investigate the effect of air pollution on CHE among middle-aged and older adults in China, and whether this effect is ameliorated by social health insurance. Methods: Using four waves of the China Health and Retirement Longitudinal Study data matched with PM2.5 and meteorological data, we included 24004 participants aged 45 and above in the analysis. CHE was defined as out-of-pocket health expenditure exceeding 40% of non-food expenditure. We employed a random effects logit model and instrumental variable estimation to examine the effect of annual average PM2.5 concentration on CHE, and analyzed mechanisms and subgroup heterogeneity. Besides, the interaction effects of social health insurance types and PM2.5 on CHE were tested. Results: PM2.5 was significantly associated with an increased likelihood of CHE among middle-aged and older adults in China. Increased exposure to PM2.5 may exacerbate CHE by elevating the direct costs of diseases and diminishing labor supply. Heterogeneity analysis indicated that those living in urban areas, aged above 65 years, with low educational attainment, and chronic conditions are more susceptible to PM2.5 than their counterparts. Further analysis revealed that only enrollment in the Urban and Rural Residents Medical Insurance, a basic health insurance with low premiums, mitigated the effect of PM2.5 on CHE among social health insurance types. Conclusions: This study provides novel evidence that improved air quality lowers the likelihood of CHE, potentially through reduced disease-related direct costs and increased labor supply. These findings underscore the necessity of air pollution regulations and offer valuable insights for developing effective strategies to prevent air pollution and illness-related poverty.