Uninsured by Choice? A Choice Experiment on Long Term Care Insurance

40 Pages Posted: 12 Aug 2019

See all articles by Faical Akaichi

Faical Akaichi

Scotland’s Rural College (SRUC)

Joan Costa-Font

London School of Economics & Political Science (LSE)

Richard G. Frank

Harvard Medical School; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Abstract

We examine evidence from two unique discrete choice experiments (DCE) on long term care insurance and several of its relevant attributes, and more specifically, choices made by 15,298 individuals in the United States with and without insurance.We study the valuation of the following insurance attributes, namely daily insurance benefit, insurance coverage, the compulsory and voluntary nature of the insurance policy design, alongside the costs (insurance premium) and health requirements This paper investigates respondents' preferences and willingness to pay (WTP) for these care insurance's attributes using a random parameter logit model, and assess the heterogeneity of choice responses using demographic, socioeconomic and attitudinal motivations to segment response to insurance choices.We find that an increase in the insurance premium by an additional 100US$ would reduce insurance uptake by 1pp. Insurance policy uptake is higher when it provides benefits for the lifetime (the monthly marginal WTP being $178.64), and voluntary (the monthly marginal WTP increases by an extra $74.71) as opposed to universal, and when it forgoes health checks (the monthly marginal WTP increases by an extra 28US$).

Keywords: long term care insurance, constrained choices, self-insurance, behavioural constraints, insurance design

JEL Classification: I18

Suggested Citation

Akaichi, Faical and Costa-Font, Joan and Frank, Richard G., Uninsured by Choice? A Choice Experiment on Long Term Care Insurance. IZA Discussion Paper No. 12501. Available at SSRN: https://ssrn.com/abstract=3435376

Faical Akaichi (Contact Author)

Scotland’s Rural College (SRUC)

Edinburgh, EH9 3JG
United States

Joan Costa-Font

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

Houghton Street
London, WC2A 2AE
United Kingdom

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

Richard G. Frank

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
617-432-0178 (Phone)
617-432-1219 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
3
Abstract Views
89
PlumX Metrics