Long-term care partnership effects on Medicaid and private insurance

Joan Costa-Font and Nilesh Raut

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We examine the impact of the Long-Term Care Insurance Partnership (LTCIP) program—a collaborative initiative between the state-level Medicaid programs and private health insurance companies designed to promote private long-term care insurance (LTCI)—on insurance ownership and Medicaid utilization. We draw on individual-level longitudinal data and employ a difference-in-differences (DD) design adjusted for the staggered implementation of the program between 2005 and 2018. Our results suggest that the rollout of the LTCIP program led to a 1.54 percentage point (pp) (14.7%) increase in LTCI ownership and a 0.82 pp (13.3%) reduction in Medicaid uptake. Our estimates suggest that these combined effects led to an approximate average cost saving of $74 per 65-year-old participant. These findings are explained by a certain degree of substitution between LTCIP and traditional LTCI contracts, ultimately postponing the use of Medicaid benefits.

Keywords: long-term care partnerships; long-term care insurance; Medicaid; United States; difference-in-differences (search for similar items in EconPapers)
JEL-codes: H11 H24 I18 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2025-03-15
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Published in Health Economics, 15, March, 2025. ISSN: 1057-9230

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