Abstract
The aim of this study was to estimate willingness to pay (WTP) for long-term care insurance (LTCI) and to explore the determinants of demand for LTCI in China. We collected data from a household survey conducted in Qinghai and Zhejiang on a sample of 1842 households. We relied on contingent valuation methods to elicit the demand for LTCI and random effects logistic regression to analyze the factors associated with the demand for LTCI. Complementarily, we used document analysis to compare the LTCI designed in this study and the current LTCI policies in the pilot cities. More than 90% of the respondents expressed their willingness to buy LTCI. The median WTP for LTCI was estimated at 370.14 RMB/year, accounting for 2.29% of average annual per capita disposable income. Price, age, education status, and income were significantly associated with demand for LTCI. Most pilot cities were found to mainly rely on Urban Employees Basic Medical Insurance funds as the financing source for LTCI. Considering that financing is one of the greatest challenges in the development of China’s LTCI, we suggest that policy makers consider individual contribution as an important and possible option as a source of financing for LTCI.
Highlights
The Chinese population is ageing and will continue to age dramatically
Considering that financing is one of the greatest challenges in the development of China’s long-term care insurance (LTCI), we suggest that policy makers consider individual contribution as an important and possible option as a source of financing for LTCI
Based on the willingness to pay (WTP) estimated in this study, we suggest that it is acceptable, from the participants’ perspective, that individual contribution is considered an important source of mobilizing funds for LTCI in China
Summary
The Chinese population is ageing and will continue to age dramatically. The United Nations projects that the percentage of Chinese people aged 60 years or above was 12.4% (168 million people) in 2010 and will increase to 28% (402 million) by 2040 [1]. The pace of population aging in China is much faster than that in other developed and developing countries [2] Together with this demographic change, China is simultaneously witnessing great socioeconomic transition. Accelerated by the one-child policy, the so-called 4-2-1 family structure (i.e., a family constituted by four grandparents, two parents and one child) has become the main stream family structure in urban China [3]. This socioeconomic transition weakens the traditional familial duties of caring and supporting the elderly [4]. Given that long-term care is quite costly in developed countries [6], the above demographic and socioeconomic shift makes the financing of long-term care a significant concern for policymakers in China
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