Explaining the Limited Size of the Private Long-Term Care Insurance Market: The Effect of Public Insurance and Tax Policy

Award Year: 2003	Investigator: Jeffrey Brown, Amy Finkelstein	Budget: $274,655	Categories: Health Insurance, Long-Term Care
Abstract: This Investigator Award project, Explaining the Limited Size of the Private Long-Term Care Insurance Market, tests economic theories to understand why most people choose not to purchase long-term care insurance, instead paying for care out of pocket. Drs. Brown and Finkelstein explore how the pricing of insurance policies and the availability of Medicaid coverage for those who are eligible influence decisions on whether to purchase long-term care insurance. They try to delineate how public policy can be used to increase demand for coverage, particularly as baby boomers age and medical costs rise. In addition, they will examine the possible effects of proposed reforms on the size of the market for longterm care insurance.