Population aging has increased the importance of understanding how long-term care interacts with healthcare. This paper examines the effects of Korea’s Long-Term Care Insurance (LTCI) reforms on healthcare utilization by exploiting successive eligibility expansions through changes in the Grade 3 eligibility cutoff in 2008, 2012, and 2013. Using the Korea Elderly Cohort Database and a regression discontinuity difference-in-differences design with individual fixed effects, the author estimates the causal effects of LTCI eligibility on overall and disease-specific healthcare utilization.

The results show that LTCI expansions significantly reduced inpatient healthcare utilization, with the effects following the 2008 introduction of LTCI substantially larger than those of subsequent eligibility expansions. The reductions were primarily driven by hospitalizations for diabetes and pneumonia, while outpatient visits for depression and dementia increased.

The findings suggest that LTCI both substitutes for avoidable inpatient care and complements outpatient care for conditions requiring continuous management. Rather than simply reducing healthcare utilization, LTCI reallocates healthcare use toward more appropriate patterns of care, highlighting the importance of better integrating long-term care and healthcare systems in rapidly aging societies.