Abstract
China launched its long-term care insurance (LTCI) program for older adults in 2016. Although the scheme has shown some promising outcomes, little is known about whether it improves subjective well-being. This study explored this topic among older persons with a disability and identified the underlying mechanisms associated with the channel of this effect using data from a national survey. The LTCI program was shown to improve the subjective well-being among older persons with a disability and this effect increased over time. The LTCI program has great positive effect among women and those who lived alone compared to their counterparts. Mechanism analysis revealed that the main channel by which the LTCI program has positive effect occurred through the satisfaction of long-term care needs and improved self-reported health. This study suggests promising benefits of the LTCI program for older Chinese adults.
• This study assessed the effects of both the introduction and duration of the LTCI program on the subjective well-being of older adults with a disability. • This study provided insight into the differential effects of the LTCI policy across various population groups. • This study explored potential mechanisms through which the LTCI program may affect subjective well-being.
• Evaluating the effect of the LTCI program in the pilot cities contributes to evidence-informed design and implementation of a national LTCI program in China. • The findings offer evidence-based implications for the Chinese government on the further implementation, expansion, and evaluation of the LTCI program. • This study supports the implementation and broader diffusion of the LTCI program to other countries, especially low- to middle-income countries.What this paper adds
Applications of study findings
Introduction
With a dramatic increase in life expectancy, population aging has become an increasing concern in China (Chang et al., 2020). The number of people aged 60 and older reached 267 million in 2021 and accounted for 18.9% of the total population of China (Wang, 2022). This demographic change presents the older adults with a disability, their families, and the government with a challenge to satisfy the demand for long-term care (LTC). Although there has been an expansion in LTC services, its growth has lagged behind other areas of activity (Feng et al., 2020; Ma et al., 2019). The growing occurrence of unmet need for LTC has led to “bed blocking” in the acute care hospital sector and growth in medical expenditures (Forder, 2009; Gaughan et al., 2015). Expansion in the provision of more appropriate LTC services in China remains an essential component of overall efforts to maintain and improve the health and well-being of older adults (Jeon & Kendig, 2017).
To promote health and well-being of older adults by providing affordable LTC services, China introduced a long-term care insurance (LTCI) program in Qingdao in 2012 and expanded it to 15 piloted cities in 2016. The LTCI program is mainly financed by public health insurance scheme funds. Individuals covered by Urban Employees Basic Medical Insurance (UEBMI) or Urban-Rural Residents Basic Medical Insurance (URRBMI) schemes are automatically enrolled in the LTCI program. A comprehensive disability assessment tool (such as the Barthel ADL index) is used to determine eligibility for LTCI, and those assessed above a certain degree of disability are deemed LTCI beneficiaries. It covers the expenses of institutional, hospital, and community care for qualified beneficiaries with certain disabilities. The details of LTCI are presented in Supplementary Table A1. The design of the LTCI program varies across the pilot cities, and there are still challenges in the establishment of a national LTCI program. Evaluating the effect of the LTCI program in the pilot cities contributes to the evidence-informed design and implementation of a national LTCI program.
Extensive efforts have been made to assess the effects of LTCI programs in Korea, Japan, and Germany (Chen & Xu, 2020). Some studies examined the effects of LTCI on the choice of formal or informal care (Courbage et al., 2020; Li & Jensen, 2011); and on the supply of informal caregivers (Fu et al., 2017; Shinya & Nakamura, 2014). There is growing evidence that the adoption of the LTCI program was associated with an improvement in the health status of older adults (Lee et al., 2014; Lei et al., 2022; Liu & Hu, 2022; Sohn et al., 2020). Some studies have explored the effects of the LTCI program on the cost of hospitalization, and on government health budgets and expenditures (Choi et al., 2018; Feng et al., 2020; Moon et al., 2021; Yu et al., 2019). However, there has been limited research on how this program affects subjective well-being. Furthermore, the strength of association between the adoption of the LTCI program and subjective well-being has been debated. A German study found that the LTCI program improved subjective well-being (Lee, 2015), while research conducted in South Korea demonstrated the LTCI program had no significant effect on life satisfaction (Jung et al., 2011; Lee, 2015; Lee & Wolf, 2014).
The main purpose of active aging is to improve quality of life (World Health Organization, 2002). This has been increasingly assessed by subjective perceptions of well-being (Lee & Wolf, 2014). While the LTCI program has been on the Chinese policy agenda for more than 5 years, none of research in China has examined how the LTCI program affects subjective well-being. Overall, this paper adds to the existing body of knowledge by evaluating the effects of the LTCI program on the subjective well-being of older adults with a disability. The causal effect is estimated using propensity score matching combined with difference-in-difference (PSM-DID) methods. The application of the PSM-DID method may reduce potential self-selection biases due to both observed factors and unobserved heterogeneity. Use of these methods assists in offering more precise causal effects (Duong & Thanh, 2019). To gain further understanding, we explore the different group effects depending on the living arrangements and gender. We further examine the mechanisms through which the LTCI program affects subjective well-being. The LTCI program may affect subjective well-being via improved health and reduced likelihood of having unmet LTC need (Berg et al., 2006; Lei et al., 2022). The findings are of direct relevance for policy makers and practitioners in China concerned with the implementation, expansion, and evaluation of the LTCI program in aging society.
Methods
Data
The study was based on data from the Chinese Longitudinal Healthy Longevity Survey (CLHLS), a nationally representative, population-based, and longitudinal survey aiming at understanding the determinants of healthy longevity among older adults aged 65 and over in China. The survey was conducted in 23 provinces, covering about 85% of the total population of China. The baseline survey was conducted in 1998, and the follow-up surveys were conducted in 2000, 2002, 2005, 2008, 2011, 2014, and 2018. Face-to-face interviews were conducted to collect data on life quality, health status, demographics, and socioeconomic characteristics both at the individual and household level. Detailed information of the survey has been published, and survey data was reported to be of high quality (Zeng et al., 2017).
Our analysis used the 2011, 2014, and 2018 waves of the CLHLS, covering the period before and after the implementation of the LTCI program. The original sample consisted of respondents over 65 years old, and only older persons with a disability (the policy relevant group) were as our research participants. Individuals who had limitations in more than one activity of daily living (ADLs, including dressing, bathing, eating, getting in and out of bed, toileting, and control over urination and defecation) were identified as disabled (Chang et al., 2020; Chen & Xu, 2020). We obtained a total of 2544 observations after we dropped observations with missing values to dependent variable and other control variables (8.6%). We created a balanced panel analysis dataset over the course of the three survey waves to better sidestep the sample attrition.
Measurement
Dependent Variable
The outcome variable of our interest is subjective well-being. It was measured by responses to a single universal self-rated life satisfaction question with responses coded on a 5-point Likert scale (1 = Very unsatisfied, 2 = Unsatisfied; 3 = General; 4 = Satisfied; 5 = Very satisfied). This measurement approach has been widely accepted as a measure of subjective well-being among older adults (Fan et al., 2022; Han & Gao, 2020).
Independent Variable
The implementation of the LTCI program was included as a dummy independent variable, with 1 representing individuals living in the pilot cities in the years when the program was operational and 0 otherwise. We restricted the treated group to individuals covered by LTCI in the pilot cities, while the respondents who did not live in pilot cities as the control group.
Mediating Variables
The mediators, including self-reported health and unmet LTC need, were collected in mechanism analysis. Self-reported health was coded as 1 if the respondent reported having “good” or “very good” health and 0 otherwise. Unmet LTC need was measured by a question asking respondents to rate whether they had received adequate care services in daily living activities to meet their needs (1 = Fully meet; 2 = Basically meet; 3 = Unmet). This type of subjective self-assessment of unmet LTC needs has been widely used in the literature (García-Gómez et al., 2015; Lei et al., 2022).
Covariates
Descriptive Statistics.
Note. SD means standard deviation.
Statistical Analysis
PSM-DID
We used the propensity score matching and difference-in-difference (PSM-DID) method to conduct the analysis. The PSM-DID method can address possible selection bias (Fu et al., 2017). The Gaussian kernel matching algorithm with a bandwidth of 0.06 was employed to take advantage of the large sample size and to reduce estimation bias (Chen et al., 2020; Lei & Lin, 2009). Furthermore, considering the characteristics of the phased launch and implementation of LTCI pilot policies, we adopted the time-varying DID approach with individual and time fixed effects to analyze the effect of LTCI policy and the effect over time. Specifically, our model controlled for both the effects of the time-invariant unobserved individual- and period-specific factors. The model was specified as follows
Mediating Effect Model
We constructed a mediating effect model following the prior research of Baron and Kenny (1986) to explore potential mechanisms through which the LTCI program might affect subjective well-being. The mediating effect model was described as
Results
Covariates Balancing Test for PSM
We performed the balancing test of covariates. Detailed results are displayed in Supplementary Table A2. The common support hypothesis of performing PSM was satisfied, as 2524 samples were included, and only 20 samples were excluded in the matched sample. The covariate balance test showed that all the covariates were balanced after matching, indicating that the PSM method achieved the randomization requirement.
Validity of the Identification Assumptions
The key assumption underlying the DID approach is known as the common trends assumption. It assumes that the outcome variables have similar trends over time for both treatment and control groups in the absence of the LTCI program. We employed the approach developed by Moser et al. (2014) to test for the parallel trend assumption (Feng et al., 2020). As reported in Figure 1, the coefficients were statistically non-significant before the implementation of the LTCI program, implying that the common trend assumption was satisfied. Common trend test. Note: The X-axis indicates a particular wave relative to the benchmark wave. The dashed line is a 95% confidence interval.
Main Results
Effect of LTCI on Life Satisfaction.
Notes: *p < 0.05, **p < 0.01, ***p < 0.001. Cluster-robust standard errors are in parentheses. The other control variables are the same as shown in Table 1.
Sub-Sample Analysis
Heterogeneity Analysis.
Notes: *p < 0.05, **p < 0.01, ***p < 0.001. Cluster-robust standard errors are in parentheses. The other control variables are the same as shown in Table 1.
Mechanism Analysis
Mediation Analysis.
Notes: *p < 0.05, **p < 0.01, ***p < 0.001. Cluster-robust standard errors are in parentheses. The other control variables are the same as shown in Table 1.
We then explored the mechanisms after controlling for the mediating indicators. As shown in Models 2 and 4 in Table 4, the positive effects of the LTCI program on subjective well-being fell by 29.1% and 14.8% after including the two mediators of self-reported health status and LTC utilization, respectively. These findings demonstrated that the LTCI program improved health and reduced unmet LTC needs, which in turn improved subjective well-being.
Robustness and Sensitivity Checks
We conducted a series of sensitivity analyses to test the robustness of our results. First, we conducted a placebo test to reduce the effects of other policies. Older adults with a disability who were not covered by the LTCI program in the pilot city were assigned to the placebo treatment group, while the control group was the same with the control group specified in our main analysis. As neither the treatment nor control group in this exercise was exposed to the LTCI scheme, there should be no significant difference in subjective well-being between these groups. The results are reported in Model 1 in Supplementary Table A3. The coefficient on the LTCI program was not statistically significant, implying that the estimated positive effect of the LTCI program on subjective well-being was not affected by other policies.
Second, we conducted a counterfactual test to verify whether life satisfaction was associated with the implementation of the LTCI program. To explore whether other unobserved external factors affected the estimation results, we assumed that the LTCI program was implemented in other waves rather than its real implementation wave. As shown in Model 2 in Supplementary Table A3, the counterfactual LTCI program was found to have no significant effect on subjective well-being, which suggests that the LTCI program indeed has a positive effect on subjective well-being as reported in the main analysis.
Third, to deal with the possible association between the unobserved omitted variables and subjective well-being, we adopted another placebo test by randomly assigning LTCI program experiment to the non-pilot cities in which the quantity is equal to the number of real pilot cases (Cai et al., 2016; La Ferrara et al., 2012). We repeated this random data generating process 500 times to avoid contamination of rare events. Supplementary Figure A1 compares the distribution of estimates from the repeated process with the benchmark estimate (Table 2 Model 2). We found that the mean value of estimates was 0.003. The distribution of estimates was clearly centered around zero, and p > .1 for most of the estimates. These results suggest that our estimates are not severely biased due to any unobserved omitted factors.
Finally, we checked whether variation in the implementation of the LTCI program across cities and time periods affected our main study findings. We used an event study estimator developed by De Chaisemartin and D’Haultfoeuille (2020), De Chaisemartin et al. (2021) to consolidate our findings, which is a valid and robust estimator when the treatment effect is heterogeneous or dynamic over time (Garrouste & Zaiem, 2020; Lindgren et al., 2021). In our analysis, we performed these treatment and placebo tests using Stata’s did_multiplegt module. As shown in Supplementary Figure A2, the estimated result was 0.183 (p < .05), which is slightly smaller than the estimate in Table 2. This suggests that our estimation results are robust and not driven by any particular time-period.
Discussion
This study examined the effect of the LTCI programs on subjective well-being for older adults with a disability in China. We took advantage of the quasi-experimental nature of the way in which the LTCI program was introduced to the pilot cities in China by constructing a PSM-DID model. Overall, our statistical analysis has revealed that the implementation of the LTCI program improved subjective well-being, and the positive effect increased over time. The results of these robustness tests strengthened the credibility of our findings concerning the positive effect of the LTCI program on subjective well-being. Our findings were consistent with previous studies. Jeon (2017) used data from South Korea and found that the national LTCI had a positive effect on the life satisfaction of older adults, and the effect became stronger over time. The evidence from our study may inspire policymakers to implement the LTCI program throughout China.
Sub-sample disparities were identified in this study. The positive effect of the LTCI program on subjective well-being was more pronounced among older adults who lived alone. This may be attributed to the fact that the formal care services and psychological comfort in the LTCI benefit package satisfied the care needs of older adults who lived alone, as the services may be considered as substitutes for informal care services provided by family members (Bakx et al., 2015; Weaver et al., 2009). With regard to diversity within the gender group, our findings suggest that the positive effect of the LTCI program appeared to be more substantial among female than their male counterpart. One possible explanation is that older women are more likely to have their remaining years spent with disability compared to their male counterpart as women have longer life expectancy than men (He & Chou, 2020; Wheaton & Crimmins, 2016). As such, older women are more likely to use formal LTC services than older men (He & Chou, 2020). The LTCI can provide care services to satisfy the care needs of female older adults, and accordingly, improve their subjective well-being to a greater extent.
Additionally, our analysis revealed that the LTCI program has a positive effect on subjective well-being through improved self-reported health and reduced the likelihood of older adults having unmet needs. This finding was consistent with previous literature. The implementation of LTCI program significantly increased the use of LTC services for older adults, and also improved the quantity of care they receive (Lei et al., 2022; Tamiya et al., 2011). Similarly, the LTCI scheme significantly improved health outcomes for older adults and relieved their physical pain (Lei et al., 2022; Ma et al., 2019). Improvement in health and increased access to LTC services for persons with a disability, probably accounts for the improvement reported in subjective well-being (Berg et al., 2006).
The empirical findings have several important implications for policy decision makers charged with the design and implementation of a national LTCI program. First, our study recommends expanding coverage, and the pilot cities warrant strengthening in order to further advance the LTCI program on an existing basis. Second, compared with older adults living with their families, older adults living alone have a higher rate of unmet LTC need, and thus, more support would go a long way in meeting unmet needs for LTC for them. Third, the LTCI program may be extended to include appropriate (and timely) clinical services for older adults with a disability started by their level of disability in order to advance their health.
Study Strengths and Limitations
There are several strengths of our study. First, this study used a nationally representative data and performed a longitudinal analysis to infer the causal effects of the LTCI program on the subjective well-being among older adults with a disability. We also assessed the effects of both the introduction and duration of the LTCI program on subjective well-being, with offering insight into the heterogeneous policy effects. Furthermore, we explored the potential mechanisms through which the LTCI program may affect subjective well-being. This study has the potential to provide a comparatively comprehensive picture of the effect of the LTCI program on the subjective well-being of older adults with a disability.
Nevertheless, several limitations should be recognized. First, there is no information on individuals’ qualification for receiving LTCI benefits in CLHLS survey. The intent-to-treat effect estimated in this study included the direct effect for LTCI beneficiaries and the spillover effect for nonusers covered by the program, so that the effect for the beneficiaries may underestimate the effect of the program. Second, by the end of 2020, the LTCI program had expanded coverage to 49 cities, so future studies are planned to explore when data is available. Third, this paper focused on examining the effect of the LTCI program on subjective well-being, but there is plenty of room to explore the effects of LTCI on other physical and mental health outcomes. Moreover, due to data limitation, we could not examine the effect among individuals under 65 years old. This is also left as one of the critical agendas for future research.
Conclusions
The study demonstrated that the LTCI program improved long-term subjective well-being among older persons with a disability. This positive effect of the program was more pronounced among women and those who lived alone compared to their counterparts. We further find that subjective well-being was improved by meeting the long-term care needs of older adults with a disability and thereby enhancing their physical health. Hence, it should further expand the coverage of the LTCI program on an existing basis to better improve the well-being of older adults with a disability.
Supplemental Material
Supplemental Material - The Effect of a Long-Term Care Insurance Program on Subjective Well-Being of Older Adults with a Disability: Quasi-Experimental Evidence from China
Supplemental Material for The Effect of a Long-Term Care Insurance Program on Subjective Well-Being of Older Adults with a Disability: Quasi-Experimental Evidence from China by Hongli Fan, Yingcheng Wang, Jinyan Gao, Zixuan Peng, and Peter C. Coyte in Journal of Applied Gerontology
Footnotes
Acknowledgments
All authors thank the Center for Healthy Aging and Development Studies, Peking University, for supporting the data.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the National Social Science Foundation of China (No. 21BRK003, No. 21BJY064), the National Natural Science Foundation of China (No. 72171133), and the National Natural Science Foundation of Shandong Province (No. ZR2021QG017).
Ethical Approval
The authors used only secondary datasets for this present study and data analyses. Therefore, approvals from Institutional Review Board (IRB) were not required.
Supplemental Material
Supplemental material for this article is available online.
References
Supplementary Material
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