Effects of the Long-term Care Insurance on Health Among Older Adults: A Panel Data From China

Background: China’s long-term care insurance (LTCI) has been launched since 2016 to ensure that older disabled people obtain affordable care services. However, rigorous evaluations of the health effects of China’s LTCI pilots have been limited. This paper aimed to examine the effects of LTCI on health among older adults aged 60 years and above. Methods: Drawing from panel data of the China Health and Retirement Longitudinal Study (CHARLS), we used a propensity score matching (PSM) and difference-in-difference (DID) approach to identify the health effects of the LTCI program and reduce the selection bias. Further, heterogeneity of the effects was examined by physical and intellectual function to evaluate whether the effects differed among subgroups of older population. Results: The implementation of LTCI significantly improved self-rated health (β = 0.15, P<.05) and cognitive function (β = 0.59, P<.01) for older adults. The results were robust when keeping only those living in pilot cities (β = 0.31, P<.05 for self-rated health status; β = 0.98, P<.001 for cognitive function) or non-pilot cities (β = 0.14, P<.05 for self-rated health status; β = 0.60, P<.01 for cognitive function) as the control group. The effects of LTCI were especially manifested in older adults with physical disability (β = 0.13, P<.01 for self-rated health; β = 0.76, P<.001 for cognitive function) or intellectual disability (β = 0.16, P<.01 for self-rated health). Conclusion: From a policy perspective, these findings suggested that LTCI in China could benefit the health outcomes of older adults, especially those with physical or cognitive disabilities. Policy-makers can target resources more effectively to improve health outcomes for the most vulnerable populations.


Text S1:
Table S1: Table S2: Table S3: Table S4: Table S5: Table S6: Table S7: In China, the medical insurance system consists of three basic insurances: the urban employee basic medical insurance scheme (UEBMI), the urban resident basic medical insurance scheme (URBMI), and the new rural cooperative medical system (NRCMS) for rural residents. 1Through these three pillars, China's medical insurance system covers almost the entire Chinese population. 2 The expansion of health insurance has greatly improved access to health care, especially for older adults in poor health. 3However, the increasing LTC needs of frail and disabled older people have become a challenge.There is a decline in informal care provided by family members due to smaller family sizes and increased labor mobility.People may even go to hospitals to seek LTC services, resulting in hospital bed congestion and increased medical expenditures. 4 ensure that older people have access to affordable care services, the Chinese government announced in July 2016 the launch of LTCI pilot projects in 15 cities and two provinces (i.e., Jilin and Shandong provinces).Some cities, such as Qingdao and Changchun, had already launched LTCI before the official announcement, whereas Shandong and Jilin provincial governments could select some cities for piloting.
The LTCI design varies with economic development, population aging, and fiscal capacities across pilot cities. Supplementary Table 1 summarizes the characteristics of LTCI pilots, including the time of introducing LTCI, the eligibility of the insured, and whether they are included in the study.All the pilots cover urban employees and retirees enrolled in UEBMI, and some also include urban residents enrolled in URBMI, as well as both urban and rural enrollees of URRBMI. 3 be eligible for LTCI benefits, individuals must have had a physical or intellectual disability for at least six months, as determined by disability assessments based on the Barthel ADL index or other assessment tools.Most LTCI pilots cover three types of LTC services, namely, home care, institutional care, and hospital care.Home care include home and community social services, such as basic care services (e.g., feeding, bathing, and safety care) and basic medical services (e.g., nursing, rehabilitation, and counseling).
Institutional care includes long-term residence and services in designated residential care facilities or nursing homes.Hospital care is provided in LTC beds by designated medical facilities.The type and frequency of LTC services available to beneficiaries depended on the severity of their disability.
The packages of LTCI vary from city to city in terms of expense reimbursement.Some reimburse users with a fixed percentage of the total expenditure, with or without a cap and within a specified period of time.
Other cities reimburse a certain amount on a daily or monthly basis and limit the total number off hours or days that can be reimbursed.There are no cash benefits.Most cities pay service providers either by service or by the day.However, there are few regulations on whether and how much a provider can charge the users on top of what LTCI pays the providers, leaving users exposed to uncertain financial risks.In September 2020, the Chinese government expanded the LTCI pilots to 14 additional cities and set out a policy framework to establish a unified LTCI system by 2025.

Figure S1 :
Figure S1: , Urban Employee Basic Medical Insurance; URBMI, Urban Resident Basic Medical Insurance; URRBMI, Urban and Rural Resident Basic Medical Insurance.

Table S1 .
List of China's LTCI pilot cities

Table S2 .
Test for sample attrition bias for the 2015-2018 panel

Table S3 .
Conversion of ADLs in CHARLS to the measurement of Barthel Index

Table S4 .
Parallel trend tests using CHARLS 2011, 2013, 2015 and 2018 Standard errors are clustered at the city level.The significance levels of 0.1%, 5%, and 1% are denoted by ***, **, and *, respectively.In column 2, we run a specification that includes three interaction terms, Treat × 2011, Treat × 2013, and Treat × 2018, with wave 2015 as the reference.All regressions control for individual fixed effects, year fixed effects, and individual covariates.

Table S5 .
The distribution of treated and control groups in the spillover study

Table S6 .
Spillover effects of LTCI on health outcomes Standard errors are clustered at the city level.The significance levels of 0.1%, 5%, and 1% are denoted by ***, **, and *, respectively.All regressions control for year FE, individual FE, and individual covariates.

Table S7 .
Heterogeneous effects of LTCI by physical function Standard errors are clustered at the city level.The significance levels of 0.1%, 5%, and 1% are denoted by ***, **, and *, respectively.All regressions control for individual fixed effects, year fixed effects, and individual covariates.Standard errors are clustered at the city level.The significance levels of 0.1%, 5%, and 1% are denoted by ***, **, and *, respectively.All regressions control for individual fixed effects, year fixed effects, and individual covariates.