Impact of Long-Term Care Insurance on Institutional Care Admission Among Older Chinese Adults: Evidence from China Health and Retirement Longitudinal Study

Little is known about the effect of implementing a long-term care insurance (LTCI) program on long-term institutional care admissions. This study employs a quasi-experimental design to examine the impact of China's LTCI pilot program on institutional care admissions among older adults. Using four waves (2013, 2015, 2018, and 2020) of the China Health and Retirement Longitudinal Study with 8,005 observations, difference-in-differences was applied to compare institutional care utilization between pilot and non-pilot cities before and after the 2016 policy implementation. Results demonstrate that LTCI significantly increases institutional care admission probability by 0.5%, indicating a profound behavioral impact despite modest absolute changes. The magnitude and direction of effect varies considerably across population subgroups. Age emerges as a key moderating factor, with older individuals showing stronger policy responsiveness. Functional disability presents a more complex pattern: while insurance coverage facilitates access for those with moderate care needs, the effect diminishes among severely disabled individuals for whom institutional care represents an unavoidable necessity. Metropolitan areas demonstrate substantially greater policy effectiveness compared to rural regions. The findings provide crucial evidence on how enabling factors in healthcare utilization operate within different demographic and geographic contexts, offering insights for policymakers designing LTCI systems in aging societies.