Projecting the Cost of Long-Term Care Insurance in Korea

Kwon Hyuk-Sung, Lee Chang-Soo and Hur Jun-Soo
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Kwon Hyuk-Sung: Department of Statistics and Actuarial Science, Soongsil University
Lee Chang-Soo: Department of Statistics and Actuarial Science, Soongsil University
Hur Jun-Soo: School of Social Welfare, Soongsil University

Asia-Pacific Journal of Risk and Insurance, 2012, vol. 7, issue 1, 22

Abstract: These days aging population is a common phenomenon in most countries in the world. As a result, many countries are making great effort to improve the quality of life of elderly people after retirement. A long-term care insurance system is one of the products of those efforts. In the middle of year 2008, long term care insurance as a form of social insurance was introduced in Korea and has been providing various services for people who need assistance with daily living activities. A myriad of opinions from various perspectives such as finance and quality have been suggested for improvement of the system. In order to resolve problems and to reflect suggestions for the purpose of developing the system, the future demand and cost needs to be carefully estimated. Also, various important decisions associated with the insurance policy should be based on the results of the projection. This paper provides a case study of public long-term care insurance in Korea and discusses methods to make projections on the future costs of long-term care insurance.

Keywords: aging population; long term care insurance; social insurance; multi-state model; Markov chain; projection; demand; cost (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1515/2153-3792.1163

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