Abstract
There are a large number of disabled elderly people in China, which results in huge care and financial burdens to their families and society. However, China has not yet launched a unified long-term care insurance (LTCI) system. This study aims to predict the contribution rate of LTCI in China from 2020 to 2050 based on the long-term care (LTC) cost of the disabled elderly, aged 65 and over, in order to provide strong evidence for the establishment of a unified and sustainable national LTCI system in China. The simulations are based on data from the population census data, the Chinese statistical yearbook, and the Chinese Longitudinal Healthy Longevity Survey (CLHLS) database. Based on the International Labor Organization (ILO) financing model from the perspective of fund balance, an overall simulation model and a Monte Carlo simulation are used to estimate the contribution rate of LTCI for disabled elderly from 2020 to 2050 in China. The total financial demands will increase sharply from 538.0 billion yuan in 2020 to 8530.8 billion yuan in 2050. Of that total, 80.2% will be required in urban areas. In addition, the per capita financial demands of care in urban and rural areas in 2050 will be approximately six times and 11 times higher than in 2020, respectively. The predicted results show that the overall contribution rate of LTCI in China will increase sharply from 1.46% in 2020 to 5.14% in 2050, an increase of about 3.5 times. By comparison, the contribution rate in 2020 will be close to 1.33% in Japan in 2015 and 1.40% in Germany in 2010. According to the 1:1 payment proportion between employer and employee, each side bears 0.68% of the insurance premium. From 2020 to 2050, the financial demands of long-term care for disabled elderly in China will increase, especially in urban areas, and the burden of per capita financial demands in rural areas will increase significantly. The overall contribution rate of LTCI will increase linearly and the payment burden of policyholders will increase year by year. This study provides evidence of the need for the establishment of a sustainable financing mechanism for multiple financial supplies.
Highlights
The aging population provides a challenge to countries in terms of meeting the needs of the aging population and by creating a policy environment [1], especially in China
The results show that the financial demands of long-term care (LTC) for disabled elderly in urban and rural areas will increase, especially in urban areas, and the burden of per capita financial demands in rural areas will increase
We estimate that the overall contribution rate of long-term care insurance (LTCI) in China from 2020 to 2050 will increase from 1.46% in 2020 to 5.14% in 2050, an increase of about 3.5 times
Summary
The aging population provides a challenge to countries in terms of meeting the needs of the aging population and by creating a policy environment [1], especially in China. The number of disabled elderlies exceeded 44 million, accounting for 19.1% of the total elderly population [4]. Previous research has shown that more than 60% of the elderly’s long-term care (LTC) was mainly provided by their families, while the proportion of disabled elderly will be more than 80% [5]. This illustrates that the elderly’s ability to resist financial risks in China is extremely limited, and the LTC of the disabled elderly places economic and care burden on individuals and their families
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