Walter M. Cadette (The Jerome Levy Economics Institute)
Abstract
The nation is ill-prepared to finance the quantum jump in long-term care spending that is on its way as the baby boom ages. By default rather than by design, Medicaid has become the main source of funds for long- term care. But reliance on Medicaid has fostered the institutionalization of the disabled elderly, has given rise to a two- tier care system, and has yielded the bizarre outcome of use of limited welfare funds by middle- and even high-income Americans who have succeeded in sheltering assets from Medicaid's spend-down requirements. Insurance would be a greatly better answer to the nation's long-term care needs. But the market will remain small and underdeveloped as long as Americans can make easy claim on Medicaid. The paper puts forth a plan for universal long-term care insurance, supported by income-scaled tax credits, to replace Medicaid in its current role. That would make for "honest government"—one that not only does not fund inheritance protection but also genuinely protects those with greatest need.
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Publisher Info
Paper provided by EconWPA in its series Macroeconomics with number
0004030.
Length: 34 pages Date of creation: 09 Oct 2000 Date of revision: Handle: RePEc:wpa:wuwpma:0004030
Note: Type of Document - Adobe Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 34; figures: included Contact details of provider: Web page: http://129.3.20.41
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This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
David M. Cutler & Louise Sheiner, 1994.
"Policy Options for Long-Term Care,"
NBER Chapters,
in: Studies in the Economics of Aging, pages 395-442
National Bureau of Economic Research, Inc.
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