Long-Term Care Partnership Effects on Medicaid and Private Insurance

Joan Costa-Font and Nilesh Raut ()

No 14753, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Can the expansion of Medicaid, a means-tested health and long-term care insurance, be slowed down by incentivising the purchase of private long-term care insurance (LTCI)? We study the implementation of the long-term care insurance partnership (LTCIP) program, a joint federal and state-level program that intended to promote LTCI coverage. Drawing on a difference-in-differences (DD) design we study the effect of the rollout of the LTCIP program between 2005 and 2016 on both LTCI uptake and Medicaid eligibility, and we estimate the effect on Medicaid savings. Drawing on a difference-in-differences (DD) design, we find that, unlike previous estimates, the introduction of the LTCIP does significantly increase LTCI coverage and reduce the uptake of Medicaid. The effects are driven by the introduction of LTCIP in states after 2010. We estimate that the adoption of LTCIP has given rise to an average Medicaid saving of $36 for every 65-year-old. This suggests scope for LTCI arrangements to reduce Medicaid spending.

Keywords: Medicaid; long-term care insurance; long-term care partnerships; United States; difference-in-differences (search for similar items in EconPapers)
JEL-codes: H11 H24 I18 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2021-09
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published online in: Health Economics ,15 March 2025

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