Long-term care insurance (LTCI) is one of the important institutional responses to the growing care needs of the ageing population. Although previous studies have evaluated the impacts of LTCI on health care utilization and expenditure in developed countries, whether such impacts exist in developing countries is unknown. The Chinese government has initiated policy experimentation on LTCI to cope with the growing and unmet need for aged care. Employing a quasi-experiment design, this study aims to examine the policy treatment effect of LTCI on health care utilization and out-of-pocket health expenditure in China. The Propensity Score Matching with Difference-in-difference approach was used to analyse the data obtained from four waves of China Health and Retirement Longitudinal Study (CHARLS). Our findings indicated that, in the aspect of health care utilization, the introduction of LTCI significantly reduced the number of outpatient visits by 0.322 times (p<0.05), the number of hospitalizations by 0.158 times (p<0.01), and the length of inpatient stay during last year by 1.441 days (p<0.01). In the aspect of out-of-pocket health expenditure, we found that LTCI significantly reduced the inpatient out-of-pocket health expenditure during last year by 533.47 yuan (p<0.01), but it did not exhibit an impact on the outpatient out-of-pocket health expenditure during last year. LTCI also had a significantly negative impact on the total out-of-pocket health expenditure by 512.56 yuan. These results are stable in the robustness tests. Considering the evident policy treatment effect of LTCI on health care utilization and out-of-pocket health expenditure, the expansion of LTCI could help reduce the needs for health care services and contain the increases in out-of-pocket health care expenditure in China.