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When the affordable has no value, and the valuable is unaffordable: The U.S. market for longterm care insurance and the role of Medicaid

Fels, Markus

I consider the popular argument of Medicaid crowding out demand for private long-term care insurance. I show that this argument rests on a wrong counterfactual comparison. Furthermore, I question the welfare-decreasing impact of Medicaid as it neglects a large value of the program in providing access to care. I show that private insurance is unable to offer a similar value. I posit that the low take-up of private insurance is due to a dilemma prevalent in - but not exclusive to - the market for long term care insurance: a dilemma between access and affordability. Several empirical patterns in insurance uptake and lapsing behavior can be explained by considering the issue of limited affordability.

Zugehörige Institution(en) am KIT Institut für Volkswirtschaftslehre (ECON)
Publikationstyp Forschungsbericht
Jahr 2016
Sprache Englisch
Identifikator DOI(KIT): 10.5445/IR/1000055418
ISSN: 2190-9806
URN: urn:nbn:de:swb:90-554182
KITopen ID: 1000055418
Verlag KIT, Karlsruhe
Umfang 23 S.
Serie Working paper series in economics ; 84
Schlagworte Aging, Insurance, Long term Care, Medicaid
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