Effect of public long-term care insurance on consumption, medical care demand, and welfare

Hideki Ariizumi

Journal of Health Economics, 2008, vol. 27, issue 6, 1423-1435

Abstract: Many governments allocate public funds to individuals who need long-term care (LTC) services as a result of chronic illnesses and functional problems. In this paper, I investigate the effects of two common eligibility criteria of LTC programs: means-tested and health-based programs. I find that publicly provided health-based LTC crowds out the medical spending among low health individuals. Furthermore, means-tested programs lead to higher initial spending on medical care and consumption goods among middle-wealth individuals. The welfare implications of these programs also depend critically upon the individuals' initial wealth and health status. Interestingly, it is possible for health-based programs to be less costly than means-tested programs.

Keywords: Long-term; care; Public; long-term; care; insurance; Dynamic; programming (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:27:y:2008:i:6:p:1423-1435

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