Effectiveness of Long-term Care Insurance from the Perspective of Supply and Demand Balance
The rapid aging of China's population structure has garnered significant attention.As the population ages,the number of the disabled elderly population in China is expected to rise considerably.However,China's social security system is not yet comprehensive,with limited government subsidies and service support for disabled elderly population.Therefore,how the government can formulate corresponding policies to address the risk of disability is a worthwhile research question.This paper analyzes the stylized facts of China's long-term care market and investigates the effects of long-term care insurance using rich data.Initially,this paper presents four observations about the long-term care market from both demand and supply perspectives.Firstly,informal care is the primary option for people with disabilities.Secondly,as the trend of low birthrate intensifies,informal care becomes unsustainable.Thirdly,there is an oversupply of beds in nursing homes,largely due to government subsidy policies.Fourthly,the supply of professional elderly care workers is inadequate due to wage penalties in the labor market.Next,this paper develops a theoretical model to analyze the mechanisms of long-term care insurance policies.China initiated long-term care insurance pilots in 2016,providing policy interventions for disabled individuals through cash subsidies and service support.Based on this,this paper constructs a theoretical model to illustrate how long-term care insurance affects the demand for long-term care services among disabled individuals,decomposing this into substitution,income,and health effects.Additionally,this paper employs a general equilibrium model to assess the impact of changes in demand induced by long-term care insurance on the supply of long-term care.Finally,this paper uses a difference-in-differences(DID)model to evaluate the impact of long-term care insurance policies.Regression results reveal that long-term care insurance significantly increases informal care at home on the demand side.Furthermore,payment models favoring cash subsidies play a more pronounced role in increasing informal care.On the supply side,the implementation of long-term care insurance has no immediate impact on the number of nursing homes,employees,institutional beds,and service prices.This paper holds significant practical significance and policy implications.It enhances existing literature's understanding of China's long-term care market and enriches the discourse on the implementation effects of long-term care insurance.By elucidating the impact of long-term care insurance on market supply and demand and its mechanisms through theoretical and empirical analyses,this paper underscores the need for government actions to reduce subsidies for nursing home beds and encourage an increase in the supply of professional nursing care workers.While this paper mainly focuses on assessing the effectiveness of long-term care insurance,there are still unanswered questions that merit exploration in future research.One such question is related to the welfare and distributional impacts of the payment model.Another area of interest is the interactive effect between the deregulation of nursing home establishment and long-term care insurance.Specifically,long-term care insurance that reimburses informal care may improve elders'preferences but potentially reduce children's wages,thus the overall effect is ambiguous.Moreover,the deregulation policy implemented in 2019,combined with the introduction of long-term care insurance,may generate a general equilibrium effect that stimulates an increase in long-term care supply.While this paper mainly focuses on assessing the effectiveness of long-term care insurance,there are still unanswered questions that merit exploration in future research.One such question is related to the welfare and distributional impacts of the payment model.Another area of interest is the interactive effect between the deregulation of nursing home establishment and long-term care insurance.Specifically,long-term care insurance that reimburses informal care may improve elders'preferences but potentially reduce children's wages,thus the overall effect is ambiguous.Moreover,the deregulation policy implemented in 2019,combined with the introduction of long-term care insurance,may generate a general equilibrium effect that stimulates an increase in long-term care supply.
Long-term Care InsuranceDemand-side EffectsSupply-side Effects
NETL
NSTL
万方数据
