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Long Term Care Partnerships: Are they 'Fit for Purpose'?

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Listed:
  • Savannah Bergquist
  • Joan Costa-i-Font
  • Katherine Swartz

Abstract

The risk of high costs of long-term care services and supports (LTSS) is one of the largest uninsured risks for American families and a major challenge to the sustainability of Medicaid. To address the latter, the so-called long-term care partnership (LTCP) program was designed to encourage middle-class individuals to purchase private long-term care insurance. The goal was to defer the time when an individual would become eligible for Medicaid to pay her LTSS expenses. This paper exploits the exogenous variation in the timing of state Partnership implementation (including four pilot states) to evaluate the program’s effects on new yearly insurance applications and contract uptake. We draw in unique data from the National Association of Insurance Commission (NAIC) and from four individual state Partnership programs, which contains data on new insurance contracts. Results indicate no significant effect of LTCP on insurance uptake but we do find evidence of both a small increase in insurance applications and some substitution between traditional and partnership contracts.

Suggested Citation

  • Savannah Bergquist & Joan Costa-i-Font & Katherine Swartz, 2015. "Long Term Care Partnerships: Are they 'Fit for Purpose'?," CESifo Working Paper Series 5155, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5155
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    References listed on IDEAS

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    1. Davidoff, Thomas, 2010. "Home equity commitment and long-term care insurance demand," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 44-49, February.
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    Cited by:

    1. Faical Akaichi & Joan Costa-Font & Richard Frank, 2019. "Uninsured by Choice? A Choice Experiment on Long Term Care Insurance," NBER Working Papers 26118, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Long Term Care (LTC) Insurance; LTC Partnerships (LTCP); subsidization; medicaid; difference in differences (DD); insurance underwriting;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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