Effect of long-term care insurance on medical expenditure and health status: National cohort study

Abstract

Long-term care insurance (LTCI) was implemented in China to solve the elderly care problems caused by the aging population. It is crucial to evaluate the effectiveness of LTCI implementation from the perspective of value-based healthcare. This study aimed to investigate the impact of LTCI on medical care expenditure and health status in China. We used staggered difference-in-differences (DID) analysis to analyze the effect of LTCI policy on medical expenditure and health status based on China Health and Retirement Longitudinal Study data from 2011 to 2018. Our findings confirmed the positive contribution of LTCI policies to medical expenditures and health status. We found that the implementation of LTCI significantly reduced inpatient and outpatient expenditure, scores of self-report of health, and CESD scores by 26.3%, 12.3%, 0.103, and 0.538, respectively. It also decreased ADL scores, but the decrease was not significant. The impact of LTCI on reducing inpatient expenditure was greater for individuals aged between 65 and 80 and those residing in urban areas and eastern cities. In terms of outpatient costs, the effect of LTCI was more pronounced among median and high-income people and people living in central and eastern cities. The impact of LTCI on self-report of health is stronger for rural populations, individuals under 80, and those in central and eastern cities. For ADL scores, LTCI affected those aged 65–80 the most. About the CESD scores, LTCI had a greater impact on rural populations, people aged 45–65, median income groups, and those in eastern cities. Our study underscored LTCI’s effectiveness in curbing medical expenditures and enhancing health status, offering valuable insights for future LTCI development in China and beyond. Accelerating the development of LTCI is conducive to improving the quality of life of the disabled elderly, enhancing the well-being of people’s livelihoods, and realizing the goal of value-based healthcare.