This text introduces the research article “Long‐Term Care Insurance and Health Inequality: Evidence From China” by Jin Ke and Fei Sun, published in The International Journal of Health Planning and Management. The article was received on July 8, 2024, revised on December 25, 2024, and accepted on January 13, 2025, with no specific funding.
Context and Purpose: China faces a growing number of older adults with functional limitations and escalating care costs, alongside existing health disparities that leave vulnerable older adults, especially those with lower socioeconomic status and in rural areas, in challenging situations. In response, the Chinese government began piloting a nationwide long-term care insurance (LTCI) system in phases since 2016, aiming to promote older adult health and ensure health equity. However, evidence on LTCI’s impact on health and health equity has been mixed, with some studies showing benefits while others indicate uneven distribution across different groups. This study specifically addresses the gap in understanding how the Chinese LTCI system affects income-related health inequality and urban-rural health inequality, and it explores the role of medical burden as a mediating mechanism.
Methodology: The study utilized five waves of data from the China Health and Retirement Longitudinal Study (CHARLS) spanning from 2011 to 2020, focusing on 32,326 participants aged 60 and older from 116 cities. Self-rated health (SRH) was used as the primary health indicator, transformed into a continuous variable for analysis. To measure health inequality, the researchers employed:
- The health concentration index (HCI) based on SRH for income-related health inequality.
- An approach to compare health status differences between urban and rural older adults for urban-rural health inequality.
The key independent variable was LTCI coverage, defined as a binary variable indicating whether an individual was covered by LTCI. The analysis employed several advanced econometric techniques:
- A staggered Difference-in-Differences (DID) model to assess the direct health effect of LTCI.
- The RIF-I-OLS decomposition technique to examine factors influencing income-related health inequality, which offers improved interpretability over previous methods.
- The Oaxaca-Blinder decomposition technique to analyze the influences contributing to health inequality between urban and rural older adults, separating explainable and unexplainable parts. Robustness tests were conducted by excluding specific pilot cities and using alternative decomposition techniques to ensure the reliability of the findings.
Key Findings: The study revealed several critical insights:
- Overall, the LTCI program was found to improve the health of Chinese older adults covered by the insurance.
- However, LTCI was also associated with widening health inequality among older residents across income classes.
- Additionally, LTCI was associated with widening health inequality between urban and rural areas.
The mechanism analysis identified a crucial factor behind these widening inequalities:
- LTCI significantly reduced out-of-pocket medical costs for high-income older adults and urban residents, but its effects on low- and middle-income older adults and rural residents were not significant. This heterogeneous impact on healthcare burden contributed directly to the observed widening health inequalities.
- Furthermore, for low- and middle-income and rural groups, LTCI proved effective in reducing out-of-pocket medical costs only if individuals were covered by LTCI and reported access to formal care services.
- A concerning finding was that the LTCI program was also associated with widened inequalities in formal care accessibility across income classes and between urban and rural areas. This suggests that the program may exacerbate existing disparities in access to formal care, undermining its potential benefits for vulnerable populations.
Implications: Despite some limitations, the study emphasizes that while expanding LTCI pilot programs is a beneficial public policy for improving older adult health, policymakers must recognize and address the concurrent widening of income-related and urban-rural health inequalities. To mitigate these disparities, future LTCI policies in China should prioritize expanding coverage to vulnerable groups and ensure equitable access to formal care facilities and resources for low- and middle-income and rural residents.
Reference: Ke, J., & Sun, F. (2025). Long‐term care insurance and health inequality: Evidence from China. The International Journal of Health Planning and Management. https://onlinelibrary.wiley.com/doi/10.1002/hpm.3905
