The Health Effects of Long-Term Care Insurance

The increasing elderly population has led to a rise in the demand for long-term care services, prompting the adoption of long-term care insurance (LTCI) as a crucial solution. Since 2012, China has been conducting a pilot LTCI program, gradually expanding its coverage. Utilizing the survey data from China Health and Retirement Longitudinal Study (2011-2018), we employ the difference-in-differences method to examine the health effects of LTCI. We find that LTCI significantly decreases the probability of outpatient visit by 7.1 percentage points, the number of outpatient visits by 0.208 times, and outpatient expenditure by 65.8%. Additionally, LTCI improves self-reported health and life satisfaction, and reduces the probability of smoking. LTCI results in health benefits, particularly notable for individuals with more than 2 chronic diseases, lower household consumption, females aged over 62, or those enrolled in more generous programs.