Subsidizing Elderly Care: Evidence from the Long-term Care Insurance
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Subsidizing Elderly Care:
Evidence from the Long-term Care Insurance
GaYoung Park and Youjin Hahn
School of Economics, Yonsei University, Seoul 03722, Korea
We explore the effect of the government-subsidized long-term care on the utilization of services covered by public health insurance and informal care of the elderly using a fuzzy regression discontinuity design. Unlike public health insurance, long-term care insurance subsidizes home and facility long-term care services. We find that the elderly eligible for the long-term care have lower medical expenditures covered by public health insurance and decrease the length of hospital stay as inpatient and outpatient. The insurance decreases the likelihood of the elderly to visit a hospital for back pain, without affecting mortality. There was a decreased propensity for the eligible elderly to have informal care provided by family, accompanied with an increased likelihood of having non-family/employed caregivers. The results imply that long-term care insurance leads the elderly to utilize less medical services and rely less on their family for their care, which could decrease the burden of the public health insurance and family members.