To Comfort Always: The Prospects of Expanded Social Responsibility for Long-Term Care

44 Pages Posted: 11 Jun 2000 Last revised: 29 Nov 2014

See all articles by Alan M. Garber

Alan M. Garber

Stanford University - Center for Primary Care and Outcomes Research; Government of the United States of America - Palo Alto Veterans Affairs Medical Center; National Bureau of Economic Research (NBER)

Date Written: February 1995

Abstract

Long-term care is an important means of providing basic and humanitarian care for elderly Americans who are severely disabled. The demand for long-term care is likely to increase dramatically as baby-boomers begin to reach advanced ages. Long-term care has been a focus of health care reform because its current financing--largely a combination of out-of-pocket payments and Medicaid--is viewed as inadequate. Only a small fraction of long-term care is financed by private insurance, which is expensive in part because moral hazard and adverse selection may create greater distortion in the utilization of long-term care than in use of hospital and physician services. Increased government financing does not appear to be a feasible option for the coming decades, since the ratio of retirees to working age adults will decline at the time that the demand for long-term care rises. Furthermore, there is little prospect that the costs of existing Federal entitlement programs can be reduced enough to finance a greatly expanded government role in long-term care. Although there are likely to be roles for private insurance, especially if it can be made more efficient, and publicly funded catastrophic coverage, Federal efforts to improve financing of long-term care are most likely to be successful if they promote private savings.

Suggested Citation

Garber, Alan M., To Comfort Always: The Prospects of Expanded Social Responsibility for Long-Term Care (February 1995). NBER Working Paper No. w5034. Available at SSRN: https://ssrn.com/abstract=225813

Alan M. Garber (Contact Author)

Stanford University - Center for Primary Care and Outcomes Research ( email )

179 Encina Commons
Stanford, CA 94305-6019
United States
650-723-0920 (Phone)
650-724-5182 (Fax)

Government of the United States of America - Palo Alto Veterans Affairs Medical Center

Palo Alto, CA 94304
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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