Long-Term Care Insurance Puzzle

Pierre Pestieau and Gregory Ponthiere

Chapter 3 in Financing Long-Term Care in Europe, 2012, pp 41-52 from Palgrave Macmillan

Abstract: Abstract In most Organization for Economic Cooperation and Development (OECD) countries, the era of long-term care (LTC) has arrived. More than two out of five people aged sixty-five or older report having some type of functional limitation (sensory, physical, mental, self-care disability or difficulty leaving home), and, as such, are not autonomous, and require adequate care.1 A few years from now, the ageing trend will accelerate, fuelled by the large ‘baby-boomer’ generation, and the relative importance of people aged 65 or older will more than double by 2050, according to the forecasts of the European Union (2009). On the other hand, with the drastic change in family values, the increasing number of childless households and the mobility of children, the number of dependant elderly who cannot rely on the assistance of anyone is increasing.2 Those two parallel evolutions — demographic and societal — explain why there is a mounting demand on governments and the market to provide alternatives to the family, which has been, across epochs, the largest provider of LTC services (even though those services, by being informal, remain hard to measure). One may hope that both private and social LTC insurance will grow substantially in the coming decades. But there are a number of problems that both the State and the market have to solve before they can replace family solidarity. The problems of private LTC can be coined by the concept of the LTC insurance puzzle.

Keywords: Nursing Home; Insurance Market; Adverse Selection; Social Assistance; NBER Working Paper (search for similar items in EconPapers)
Date: 2012
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Related works:
Working Paper: The Long Term Care Insurance Puzzle (2011)
Working Paper: The Long Term Care Insurance Puzzle (2011)
Working Paper: Long term care insurance puzzle (2010)
Working Paper: Long term care insurance puzzle (2010)
Working Paper: Long term care insurance puzzle (2010)
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DOI: 10.1057/9780230349193_3

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