Reforming the US Long-Term Care Insurance Market

R. Braun and Karen Kopecky

No 24-17, Working Papers from Federal Reserve Bank of Cleveland

Abstract: Nursing home risk is significant and costly. Yet, most Americans pay for long-term care (LTC) expenses out-of-pocket. This chapter examines reforms to both public and private LTCI provision using a structural model of the US LTCI market. Three policies are considered: universal public LTCI, no public LTCI coverage, and a policy that exempts asset holdings from the public insurance asset test on a dollar-for-dollar basis with private LTCI coverage. We find that this third reform enhances social welfare and creates a vibrant private LTCI market while preserving the safety net provided by public insurance to low-income individuals.

Keywords: Long-term care insurance; Medicaid; adverse selection; partnership program (search for similar items in EconPapers)
JEL-codes: D82 D91 E62 G22 H30 I13 (search for similar items in EconPapers)
Pages: 34
Date: 2024-08-14
New Economics Papers: this item is included in nep-age and nep-hea
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Working Paper: Reforming the US Long-Term Care Insurance Market (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwq:98684

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DOI: 10.26509/frbc-wp-202417

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