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The Impact of the Partnership Long-term Care Insurance Program on Private Coverage and Medicaid Expenditures

Author

Listed:
  • Haizhen Lin

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

  • Jeffrey T. Prince

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

Abstract

We examine the impact of U.S. states’ adoption of the partnership long-term care (LTC) insurance program on households’ purchases of private coverage. This program increases benefits of privately insuring via a higher asset threshold for Medicaid eligibility for LTC coverage, and targets middle-class households. We find the program generates few new purchases of LTC insurance, and those it generates are almost entirely by wealthy individuals, as predicted by Medicaid crowd-out. Further analysis suggests that awareness levels of the program, along with bequest intentions, also effectively predict response rates, but Medicaid crowd-out persists. We provide an estimate of expected Medicaid savings/costs.

Suggested Citation

  • Haizhen Lin & Jeffrey T. Prince, 2012. "The Impact of the Partnership Long-term Care Insurance Program on Private Coverage and Medicaid Expenditures," Working Papers 2012-01, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    • Handle: RePEc:iuk:wpaper:2012-01
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    References listed on IDEAS

    as
    1. Jeffrey R. Brown & Norma B. Coe & Amy Finkelstein, 2007. "Medicaid Crowd-Out of Private Long-Term Care Insurance Demand: Evidence from the Health and Retirement Survey," NBER Chapters, in: Tax Policy and the Economy, Volume 21, pages 1-34, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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