Health effects of long-term care insurance on spouses of disabled people: a quasi-experimental study

It is still uncertain whether and how formal long-term care (LTC) systems affect the health status of family members. This paper examines the health effects of long-term care insurance (LTCI) on spouses of disabled people in China.

The data is from China Health and Retirement Longitudinal Survey (CHARLS), a longitudinal survey of a nationally representative sample of Chinese residents aged 45 or older and their spouses, and China City Statistical Yearbook. Exploiting the regional variation in the implementation of LTCI in the first round of pilot cities in China, a difference-in-difference (DID) strategy is applied to identify the causal effects of LTCI on the health status of spouses of disabled people. We carefully identify the causal effects by controlling for city-level covariates, testing common trends between the treatment and control groups, combining propensity score matching (PSM) with DID, selecting the second round of pilot cities as the control group, controlling for city fixed effects (FE) instead of individual FE, and evaluating selection bias from omitted observable and unobservable factors.

The introduction of LTCI in China reduces the number of painful body parts and the self-reported health score significantly, indicating that spouses of disabled people get physical health benefits from LTCI coverage. However, the impact of LTCI on the depression index remains ambiguous and needs to be analyzed further. LTCI improves the physical health status of spouses of disabled individuals mainly through the time reallocation channel, while the impact of the consumption promotion channel has not been verified. Furthermore, the beneficial effects of LTCI on physical health are stronger for spouse caregivers and spouses with lower-level education and lower household income.

These findings demonstrate that LTCI not only improves the health status of family caregivers by reducing their caregiving burden but also has beneficial health effects on non-caregiver family members. Policy designs of LTCI should emphasize the orientation of home and community-based care services (HCBS), which can not only satisfy the care preferences of disabled individuals, reduce the care burden on family caregivers, promote the health of all family members, but also prevent a large number of disabled individuals from choosing high-cost institutional care and reduce the financial burden of the LTCI Fund.