Long-Term Care Insurance Fund-Raising Mechanism Research For The Elderly Of China

The population of China takes one fifth of the world, and its decreasing birth rate and increasing average life span expected contribute to a faster aging speed than other countries. Currently, as China has stepped into a repaid development time of aging, the demand of care for the elderly people who have lost their life capacity or part of their life capacity is increasing. With the development of technology and medical service level, high mortality rate diseases can be conversed to be chronic ones, which lengthen the life span of aging people.In addition, along with the development of industrialization and urbanization, Chinese family structure tends to be more simply and emptied than before. Under such circumstances, demands for elderly long term care service, such as daily life care and recovering nursing, and relevant fund have become greater. At present, insurance market has already designed commercial long-term care insurance catering the need of aging people, specifically there are 17 companies introducing 163 care insurance products. However, considering closely the elderly people who need such care, these products are still far away from being sufficient, moreover, they require long time expense, relatively high charge, limited personal income, which cause huge economic pressure to clients undoubtedly. China has put much more attention on establishing an overall security system for the elderly, and local governments have gradually set to explore long-term care security mode. In the early 2012, Qingdao initially establishes the first urban long-term medical care insurance system in China, which requires to assemble the elderly’s medical service and care service together to the same system. It has been spread to the rural area by now. In May 2015, under the guidance of the government, Haidian district of Beijing started to conduct commercial elderly long-term care insurance, which will be carried out by the end of 2015. However, such kinds of experiment are in still limited scale. They cannot reach to all aging people’s demand for long term care insurance.Based on the background described above, the paper proposes a funding system for establishing an elderly long-term care insurance system. To raise funds is not only an important link in ensuring the normal running of elderly long-term care insurance, it is also a key problem in enhancing the overall establishment of this insurance system. In the view of the elderly long-term care insurance fund raising, this paper initially defines the funding concept of elderly long-term care insurance, clarifies the basic elements of funding system to be responsibility, resources, levels of raising funds and financial mode, and explains the connections between all these elements. Secondly, based on the analyses of elderly long-term care insurance funding methods in foreign typical countries, combing with domestic social insurance funding methods, it can be confirmed that government, enterprises and individuals should all make contribution to the fund of elderly long-term care insurance in China. Thirdly, according to the concept of dividing the risk, t empirical research has been conducted in various financing level of different places and different fund proportion given by the three parties. The paper includes confirming the influential factors of raising funds levels, according to the relevant date of Shanghai. A clustering analysis is then conducted for 31 provinces and cities based on the significant influential factors, which is further measured by ILO funding mode to calculate the funding proportions under the three categories. Additionally, an analysis of affordability of three parties is demonstrated, referring to foreign countries experiences, showing the different proportions of government, enterprises and individuals in raising funds of long-term care insurance in China.This paper focuses on the realistic problem of the elderly long-term care insurance funding level. It is the first time to divide 31 provinces and cities into three categories according to significant influential factors of funding level. After confirming the cost scale of the aged 40 and over, the three categorized places funding levels have been calculated through the health system financing mode. Specifically, the proportion of 3.39% represents for the first group of places,1.98 and 3.49% are for the second and third group respectfully. This result is in line with the economic development level and the public living standards. In the process of raising funds, the proportion taken by each parties should be 7.3% by government, 3.58% enterprises and 3.65% by individuals, which is 2:1:1. With the same amount of total funds, based on the system structure of country, enterprises and individuals, it is advocated that individuals can choose to purchase commercial insurances with even higher level considering their own capacity and willingness. According to the results of calculation, the following five proposes probably should be taken into consideration, first is to develop the legal construction; second is to explore diversified financing methods; the level of financing should be various rather than too high to reach; fourth is to give priority to developed places, then spread to other areas; fifth is to improve personal insurance awareness. In general, the insurance policy suggestions, which are generated from the empirical experiments, have become more feasible and convincible to establish elderly long-term care insurance.