Published online by Cambridge University Press: 02 December 2019
Older adults have more health-care needs and higher financial burdens but fewer income resources compared to other age groups in China. Meanwhile, substantial inequalities exist between rural and urban older adults in terms of welfare benefits level, access to health care, quality of care and financial resources to pay for health-care services. Using 2011–2013 panel data from the China Health and Retirement Longitudinal Study and a difference-in-differences methodology, this study examined the association between the incidence of catastrophic health expenditure (CHE) and health-related quality of life among older adults in China. To distinguish the dynamic of CHE and generate rigorous estimates, we categorised the older adults into four groups: CHE entry group, non-CHE group, CHE exit group and CHE persistent group. Overall, we found that entry into CHE was associated with poorer physical and mental health for both rural and urban older adults, but this association was more consistent and robust for physical than for mental health. Exiting CHE was found to have a weak and sporadic positive association with physical and mental health across rural and urban areas. The results suggest that financial resources and social services are needed in China to support older adults who experience CHE persistently or periodically to help improve their health outcomes.