Effect of public long-term care insurance on consumption, medical care demand, and welfare
Many governments allocate public funds to individuals who need long-term care (LTC) services as a result of chronic illnesses and functional problems. In this paper, I investigate the effects of two common eligibility criteria of LTC programs: means-tested and health-based programs. I find that publicly provided health-based LTC crowds out the medical spending among low health individuals. Furthermore, means-tested programs lead to higher initial spending on medical care and consumption goods among middle-wealth individuals. The welfare implications of these programs also depend critically upon the individuals' initial wealth and health status. Interestingly, it is possible for health-based programs to be less costly than means-tested programs.
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.:
- Sloan, Frank A. & Thomas J. Hoerger & Gabriel Picone, 1996. "Effects of Strategic Behavior and Public Subsidies on Families' Savings and Long-Term Care Decisions," Working Papers 96-01, Duke University, Department of Economics.
- Carroll, Christopher D, 1997.
"Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(1), pages 1-55, February.
- Christopher D Carroll, 1990. "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis," Economics Working Paper Archive 371, The Johns Hopkins University,Department of Economics, revised Aug 1996.
- Christopher D. Carroll, 1996. "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis," NBER Working Papers 5788, National Bureau of Economic Research, Inc.
- Liljas, Bengt, 2000. "Insurance and imperfect financial markets in Grossman's demand for health model -- a reply to Tabata and Ohkusa," Journal of Health Economics, Elsevier, vol. 19(5), pages 821-827, September.
- Norton, Edward C., 2000. "Long-term care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 17, pages 955-994 Elsevier.
- Picone, Gabriel & Uribe, Martin & Mark Wilson, R., 1998. "The effect of uncertainty on the demand for medical care, health capital and wealth," Journal of Health Economics, Elsevier, vol. 17(2), pages 171-185, April.
- Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, August.
- Liljas, Bengt, 1998. "The demand for health with uncertainty and insurance," Journal of Health Economics, Elsevier, vol. 17(2), pages 153-170, April.
When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:27:y:2008:i:6:p:1423-1435. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.