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Health risk, medical underwriting, and long-term care insurance partnerships

Author

Listed:
  • Costa-Font, Joan
  • Raut, Nilesh

Abstract

Given the high and uncertain costs of long-term care (LTC), insurers commonly rely on medical underwriting to determine eligibility. We examine the impact of the rollout of the Long-Term Care Insurance Partnership (LTCIP) programme—a joint federal–state initiative aimed at promoting private LTCI in the United States by shifting catastrophic costs to Medicaid and reducing insurers' risk exposure—using a difference-in-differences framework with heterogeneous effects by pre-LTCIP health status and chronic conditions. Using longitudinal data, we find that LTCIP increased LTCI take-up among both healthier and higher-risk individuals, with a positive effect of 2.1 percentage points among individuals with chronic conditions and a larger effect of 4.8 percentage points among those without chronic conditions. These findings are consistent with a partial relaxation of underwriting constraints.

Suggested Citation

  • Costa-Font, Joan & Raut, Nilesh, 2026. "Health risk, medical underwriting, and long-term care insurance partnerships," LSE Research Online Documents on Economics 140540, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:140540
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    File URL: https://researchonline.lse.ac.uk/id/eprint/140540/
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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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