Long Term Care Partnerships: Are They 'Fit for Purpose'?

52 Pages Posted: 27 Jan 2015

See all articles by Savannah Bergquist

Savannah Bergquist

Harvard University

Joan Costa-Font

London School of Economics & Political Science (LSE)

Katherine Swartz

Harvard School of Public Health, Harvard University

Date Written: October 1, 2015

Abstract

The risk of high costs of long-term care services and supports (LTSS) is one of the largest uninsured risks for American families and a major challenge to the sustainability of Medicaid. To address the latter, the so-called long-term care partnership (LTCP) program was designed to encourage middle-class individuals to purchase private long-term care insurance. The goal was to defer the time when an individual would become eligible for Medicaid to pay her LTSS expenses. This paper exploits the exogenous variation in the timing of state Partnership implementation (including four pilot states) to evaluate the program’s effects on new yearly insurance applications and contract uptake. We draw in unique data from the National Association of Insurance Commission (NAIC) and from four individual state Partnership programs, which contains data on new insurance contracts. Results indicate no significant effect of LTCP on insurance uptake but we do find evidence of both a small increase in insurance applications and some substitution between traditional and partnership contracts.

Keywords: Long Term Care (LTC) Insurance, LTC Partnerships (LTCP), subsidization, medicaid, difference in differences (DD), insurance underwriting

JEL Classification: H310, I180, I380, J140

Suggested Citation

Bergquist, Savannah and Costa-Font, Joan and Swartz, Katherine, Long Term Care Partnerships: Are They 'Fit for Purpose'? (October 1, 2015). CESifo Working Paper Series No. 5155. Available at SSRN: https://ssrn.com/abstract=2555540

Savannah Bergquist

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Joan Costa-Font (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://https://joancostaifont.org/

Katherine Swartz

Harvard School of Public Health, Harvard University ( email )

677 Huntington Avenue
Kresge Building, Room 404
Boston, MA 02115
United States
617-432-4325 (Phone)
617-432-4494 (Fax)

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