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The Role of Private Finance in Paying for Long Term Care

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  • Les Mayhew
  • Martin Karlsson
  • Ben Rickayzen

Abstract

An ageing population and increased longevity means that long term care will become progressively more expensive. In 2009 the Government published a Green Paper on future funding options and a White Paper in 2010. This article considers the role of private finance products under the 'Partnership' option. It finds that few households are able to pay for LTC based on income and savings but the number increases if housing assets are included. We show that products can be devised for a range of circumstances, although state support would need to continue. We propose a simplified means testing system based on a combination of income and assets. Copyright © The Author(s). Journal compilation © Royal Economic Society 2010.

Suggested Citation

  • Les Mayhew & Martin Karlsson & Ben Rickayzen, 2010. "The Role of Private Finance in Paying for Long Term Care," Economic Journal, Royal Economic Society, vol. 120(548), pages 478-504, November.
  • Handle: RePEc:ecj:econjl:v:120:y:2010:i:548:p:f478-f504
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    Cited by:

    1. Hancock, Ruth & Malley, Juliette & Wittenberg, Raphael & Morciano, Marcello & Pickard, Linda & King, Derek & Comas-Herrera, Adelina, 2013. "The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England," Health Economics, Policy and Law, Cambridge University Press, vol. 8(01), pages 47-73, January.
    2. Philippe De Donder & Marie-Louise Leroux, 2012. "Behavioral Biases and Long Term Care Annuities: A Political Economy Approach," CESifo Working Paper Series 3972, CESifo Group Munich.
    3. Ruth Hancock & Marcello Morciano & Stephen Pudney & Francesca Zantomio, 2015. "Do household surveys give a coherent view of disability benefit targeting?: a multisurvey latent variable analysis for the older population in Great Britain," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 178(4), pages 815-836, October.
    4. Wildman, John & McMeekin, Peter, 2014. "Health care and social care: complements, substitutes and attributes," MPRA Paper 54425, University Library of Munich, Germany.
    5. De Donder Philippe & Leroux Marie-Louise, 2013. "Behavioral Biases and Long-Term Care Insurance: A Political Economy Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 551-575, May.
    6. Ziebarth, Nicolas R., 2017. "Social Insurance and Health," IZA Discussion Papers 10918, Institute for the Study of Labor (IZA).
    7. repec:pal:gpprii:v:42:y:2017:i:3:d:10.1057_s41288-016-0041-0 is not listed on IDEAS
    8. Tennyson, Sharon & Yang, Hae Kyung, 2014. "The role of life experience in long-term care insurance decisions," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 175-188.

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