The outbreak of “2019-nCoV” rings the alarm bell of illness risks. Recently, according to “China Statistical Yearbook”, the annual growth rate of per capita health care expenditure in China has recorded double-digit since 2014, which is creating huge medical expenditure burdens and hardly ignored in residents’ daily life. When pursuing a better life, the difficulties and high costs of getting medical services have threaten residents’ normal living for a long time. “2019 Medical Trends around the World” issued by Marsh & McLennan Companies indicated that the inflation rate of medical expenditure was up to 9.7% in China 2018, which means falling into or falling back to poverty for catching diseases would still bother residents’ mind. How to choose an appropriate way of illness risk transfer is an unavoidable problem for residents.
Clan mutual assistance has been a traditional way to share the loss of diseases since ancient times, whereas commercial health insurance is a more efficient way in modern market for healthy risk sharing. As a result, clan mutual assistance will influence commercial health insurance demand. However, previous literature only pays attention on the “crowd-out” relationship between clan mutual assistance and commercial health insurance. Those researches ignore that folks can use both clan mutual assistance and commercial health insurance to improve health care levels. Besides, illness risk information can be delivered by clan mutual assistance, which will stimulate clan members’ risk perception and improve their commercial health insurance demand.
Based on China Household Finance Survey Data（CHFS）, this paper sets variables from culture and transfer expenditure perspectives to show that clan mutual assistance can “crowd in” commercial health insurance demand, which is still robust when considering the endogenous effect. In mechanism analysis, by using semiparametric difference-in-difference（SDID）, clan mutual assistance impacts commercial health insurance demand by delivering illness risk perception. Besides, the moderating effect indicates that when receiving illness risk information from clan mutual assistance, people who have higher finance literacy in low income group will have more tendencies to buy commercial health insurance. Heterogeneity analyses find that urban group enjoying higher quality social welfare has more “crowd-in” effect than rural group; in the majority of age ranges, clan mutual assistance shows a positive effect on folks’ commercial health insurance demand.
Therefore, when marketing the commercial health insurance, insurance industry should avoid putting clan mutual assistance and commercial health insurance into two opposite poles, so as to reduce residents’ resistance to commercial health insurance. Secondly, insurance industry needs to expand the rural market to give more connections between rural residents and commercial health insurance, which will improve commercial health insurance demand in rural areas. Thirdly, suburb can be a crucial segmental market where insurance industry can explain the limits of clan mutual assistance and persuade new citizens migrating from rural places to use commercial health insurance to share illness risks.