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Associations of Demand for Private Long-Term Care Insurance, Willingness to Pay, and Precautionary
Savings with Preferences for Long-Term Care Systems

3. Findings

We present the significant characteristics of the groups that select a mandatory public
LTC insurance system and those that choose a tax-funded LTC system; the findings could

also serve as a basis for improving the social welfare of Taiwanese people under Taiwan’s
tax-funded LTC 2.0 system. Specifically, we discover that respondents who exhibit higher
levels of the three self-choice finance behaviors tend to prefer the mandatory public
LTC insurance system. The individuals in this group are predominantly male, married,

working-class, aged between 40 and 64 years, earning less than NT$1,990,000 annually,
genuinely concerned about their longevity risk, and anxious about having to make a
series of future LTC payments. By contrast, the individuals who choose a tax-funded LTC
system predominantly earn more than NT$2,000,000 annually, have more family members

(e.g., more than three members), and mainly reside in Taiwan’s northern (Taipei and New
Taipei), central (Taichung and Changhua), and southern (Tainan and Kaohsiung) regions.
Finally, to test the robustness of the aforementioned empirical results, we perform the
Brant test to examine the proportional odds assumptions underlying our ordered logistic

regression. The null hypotheses reveal that the relationship between each pair of outcome
groups is identical. Although several determinants fail to pass the test, our results for
choice behavior (i.e., mandatory public LTC insurance system or tax-funded LTC system)
remain robust for the two groups examined in the present study.

4. Research Implications

Our study outcomes have implications for improving the social welfare of Taiwanese

people under Taiwan’s tax-funded LTC 2.0 system. Our empirical findings can help
Taiwan’s regulator understand how a steady growth in household income can influence
and change people’s LTC system preferences (from a tax-funded LTC system to a
mandatory public LTC insurance system), thereby helping the regulator to revise the

current tax-funded LTC 2.0 policy and improve Taiwan’s social welfare with respect to
various LTC service needs. That is, a formal long-term care system is required to replace
informal caregiving arrangements in home-based care settings (including home visit
services, day care services or short-stay services in community-based LTC facilities),

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