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Financing Long‐Term Care: Ex Ante, Ex Post or Both?

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  • Joan COSTA‐FONT
  • Christophe Courbage
  • Katherine Swartz

Abstract

This paper attempts to examine the heterogeneity in the public financing of long‐term care (LTC) and the wide‐ranging instruments in place to finance LTC services. We distinguish and classify the institutional responses to the need for LTC financing as ex ante (occurring prior to when the need arises, such as insurance) and ex post (occurring after the need arises, such as public sector and family financing). Then, we examine country‐specific data to ascertain whether the two types of financing are complements or substitutes. Finally, we examine exploratory cross‐national data on public expenditure determinants, specifically economic, demographic and social determinants. We show that although both ex ante and ex post mechanisms exist in all countries with advanced industrial economies and despite the fact that instruments are different across countries, ex ante and ex post instruments are largely substitutes for each other. Expenditure estimates to date indicate that the public financing of LTC is highly sensitive to a country's income, ageing of the population and the availability of informal caregiving. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Joan COSTA‐FONT & Christophe Courbage & Katherine Swartz, 2015. "Financing Long‐Term Care: Ex Ante, Ex Post or Both?," Health Economics, John Wiley & Sons, Ltd., vol. 24, pages 45-57, March.
  • Handle: RePEc:wly:hlthec:v:24:y:2015:i::p:45-57
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    References listed on IDEAS

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    1. Liliana E. Pezzin & Barbara Steinberg Schone, 1999. "Intergenerational Household Formation, Female Labor Supply and Informal Caregiving: A Bargaining Approach," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 475-503.
    2. Brown, Jeffrey R. & Finkelstein, Amy, 2007. "Why is the market for long-term care insurance so small?," Journal of Public Economics, Elsevier, vol. 91(10), pages 1967-1991, November.
    3. Katherine Swartz & Naoko Miake & Nadine Farag, 2012. "Long‐term care: Common issues and unknowns," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 139-152, December.
    4. Joan Costa-Font, 2010. "Family ties and the crowding out of long-term care insurance," Oxford Review of Economic Policy, Oxford University Press, vol. 26(4), pages 691-712, Winter.
    5. Joan Costa-Font & Jaume García-Villar, 2009. "Risk Attitudes And The Demand For Private Health Insurance: The Importance Of 'Captive Preferences'," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 80(4), pages 499-519, December.
    6. Zweifel, Peter & Struwe, Wolfram, 1996. "Long-Term Care Insurance and Bequests as Instruments for Shaping Intergenerational Relationships," Journal of Risk and Uncertainty, Springer, vol. 12(1), pages 65-76, January.
    7. Joan Costa‐Font & Marin Gemmill & Gloria Rubert, 2011. "Biases in the healthcare luxury good hypothesis?: a meta‐regression analysis," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 174(1), pages 95-107, January.
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    Cited by:

    1. repec:eee:joecag:v:12:y:2018:i:c:p:151-158 is not listed on IDEAS
    2. Joan Costa-Font & Martin Karlsson & Henning Øien, 2015. "Informal Care and the Great Recession," CINCH Working Paper Series 1502, Universitaet Duisburg-Essen, Competent in Competition and Health, revised Feb 2015.
    3. repec:eee:insuma:v:81:y:2018:i:c:p:51-70 is not listed on IDEAS
    4. Joan Costa-Font & Sergi Jiménez-Martín & Cristina Villaplana, 2016. "Does Long-Term Care Subsidisation Reduce Unnecessary Hospitalisations?," Working Papers 2016-05, FEDEA.
    5. Bergquist, Savannah & Costa-Font, Joan & Swartz, Katherine, 2018. "Long-term care partnerships: Are they fit for purpose?," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 151-158.
    6. repec:eee:socmed:v:207:y:2018:i:c:p:1-10 is not listed on IDEAS
    7. repec:pal:gpprii:v:44:y:2019:i:2:d:10.1057_s41288-019-00122-0 is not listed on IDEAS
    8. repec:bla:glopol:v:8:y:2017:i:s2:p:38-45 is not listed on IDEAS
    9. Joan Costa-i-Font & Sergi Jimenez-Martin & Cristina Vilaplana, 2016. "Does Long-Term Care Subsidisation Reduce Hospital Admissions?," CESifo Working Paper Series 6078, CESifo Group Munich.
    10. repec:eee:jhecon:v:58:y:2018:i:c:p:43-66 is not listed on IDEAS
    11. Rapp, Thomas & Apouey, Bénédicte H. & Senik, Claudia, 2018. "The impact of institution use on the wellbeing of Alzheimer's disease patients and their caregivers," Social Science & Medicine, Elsevier, vol. 207(C), pages 1-10.
    12. repec:pal:gpprii:v:44:y:2019:i:2:d:10.1057_s41288-018-00114-6 is not listed on IDEAS
    13. repec:spr:sochwe:v:49:y:2017:i:3:d:10.1007_s00355-016-0999-3 is not listed on IDEAS
    14. Joan Costa-Font & Sergi Jiménez-Martín & Cristina Vilaplana-Prieto, 2016. "Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers," Working Papers 2016-08, FEDEA.
    15. Costa-i-Font, Joan & Karlsson, Martin & Øien, Henning, 2016. "Careful in the crisis? Determinants of older people's informal care receipt in crisis-struck European countries," LSE Research Online Documents on Economics 66916, London School of Economics and Political Science, LSE Library.
    16. Panos Kanavos & Olivier Wouters & Joan Costa-Font & Christophe Courbage & Peter Zweifel, 2017. "Policy Dilemmas in Financing Long-term Care in Europe," Global Policy, London School of Economics and Political Science, vol. 8(s2), pages 38-45, March.
    17. Philippe Donder & Marie-Louise Leroux, 2017. "The political choice of social long term care transfers when family gives time and money," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 755-786, December.
    18. Philippe De Donder & Marie-Louise Leroux, 2015. "The Political Economy of (in)formal Long Term Care Transfers," Cahiers de recherche 1508, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    19. repec:bla:glopol:v:8:y:2017:i::p:38-45 is not listed on IDEAS
    20. Costa-Font, Joan & Jimenez-Martin, Sergi & Vilaplana, Cristina, 2018. "Does long-term care subsidization reduce hospital admissions and utilization?," Journal of Health Economics, Elsevier, vol. 58(C), pages 43-66.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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