The effect of long-term care insurance on multidimensional poverty among disabled older adults: evidence from China

Background With the rapid aging population, the number of disabled older adults in China is increasing, and they often face multiple deprivations beyond income poverty, such as poor health, social isolation, and lack of social security. Since 2016, China has implemented a long-term care insurance (LTCI) pilot program. However, little is known about whether LTCI can alleviate the multidimensional poverty of disabled older adults. Methods Using panel data from the 2018 and 2020 waves of the China Health and Retirement Longitudinal Study (CHARLS), we constructed a multidimensional poverty index (MPI) covering five dimensions: health status, mental state, social security, social participation, and economic income. A cross-sectional difference-in-differences (DID) method was employed to estimate the effect of LTCI on multidimensional poverty. Heterogeneity by disability severity (mild, moderate, severe) was examined using interaction terms. Results The sample included 39,119 observations (19,405 in 2018; 19,367 in 2020), with 18.6% of participants covered by LTCI. LTCI significantly reduced the MPI among disabled older adults in 2018 (coefficient = -0.00709, p < 0.05), indicating a poverty reduction effect. The most pronounced reductions were observed in health poverty, mental poverty, and social security poverty, while effects on social participation and economic income were not significant. The poverty alleviation effect was limited by low coverage (18.6%). Heterogeneity analysis showed that moderate disability was associated with the highest risk of MP (interaction coefficient = 0.0501, p < 0.001), followed by severe (0.0482, p < 0.001) and mild disability (0.0130, p < 0.05). Robustness checks using PSM-DID and placebo tests confirmed the main findings. Conclusions LTCI plays a modest but significant role in alleviating multidimensional poverty among disabled older adults, particularly in health and mental dimensions. Policy should expand coverage, strengthen preventive care, and tailor benefits to disability severity to enhance poverty reduction.