The Effect of Long-term Care Insurance on Healthcare Utilization of Middle-aged and Older Adults: Evidence from China Health and Retirement Longitudinal Study

Background: As global ageing continues to increase and many countries face challenges from the growing demand for long-term care. Drawing on the experiences of developed countries, developing countries have explored their own suitable long-term care insurance and have shown strong potential for development and research prospects. However, due to their late start, relevant research is underrepresented in the global research network and still needs to be supplemented. The present study hopes to examine the effect of long-term care insurance on healthcare utilization among the middle-aged and elderly from an empirical perspective, using China as an example.

Methods: Panel data from wave 3 (2015) and wave 4 (2018) of the nationally-representative China health and retirement longitudinal study were selected to obtain a sample of 661 processing participants and 16,065 control participants after matching the policy implementation time in the first pilot cities, and quantitative analysis was conducted using difference-in-differences propensity score matching estimator method to assess the net effect of long-term care insurance on health care utilization among the middle-aged and elderly adults.

Results: In the matched frequency-weighted regression difference-in-differences estimator results, long-term care insurance had a negative effect on the number and costs of annual hospitalizations at the 5% significance level (key variable values of - 0.0568101 and - 1236.309, respectively) and a non-significant effect on outpatient service utilization (P > 0.05). Further exploration of the heterogeneous effect of it revealed that implementation had a more significant negative effect on hospitalization utilization for middle-aged and older people in the East and for those with higher levels of education or attended care.

Conclusion: Long-term care insurance has played a role in controlling hospitalization costs but has not yet achieved the expected effect in controlling outpatient costs. The policy effects in terms of regional distribution and education level and care situation have been variable. The treatment plan of long-term care insurance needs to be improved, the supply of resources for long-term care services should be increased, and the promotion of long-term care insurance and health science should be given attention.