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Determinants of Policy Response: The Case of the Partnership Long-Term Care Insurance Program

Author

Listed:
  • Haizhen Lin

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

  • Jeffrey T. Prince

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

Abstract

Building on the findings of Lin and Prince (2013), we analyze several additional potential determinants of response to the partnership long-term care (PLTC) program, in addition to wealth. The determinants we consider are bequest motives, financial literacy, and program awareness. We find mild evidence that intent to bequest influences individual purchases of the partnership program. However, we find strong evidence that program awareness is necessary for response while financial literacy notably increases responsiveness. We also find that, even with these additional controls, a difference in response across wealth levels persists, suggesting that Medicaid crowd-out is still important in determining uptake of this program. These findings suggest that increasing response to the program among the middle class (the stated target group) requires increased education about the program’s benefits and increased efforts to create awareness of the program existence, at least among the middle class.

Suggested Citation

  • Haizhen Lin & Jeffrey T. Prince, 2014. "Determinants of Policy Response: The Case of the Partnership Long-Term Care Insurance Program," Working Papers 2014-03, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    • Handle: RePEc:iuk:wpaper:2014-03
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    File URL: http://kelley.iu.edu/riharbau/RePEc/iuk/wpaper/bepp2014-03-lin-prince.pdf
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    References listed on IDEAS

    as
    1. Lee M. Lockwood, 2018. "Incidental Bequests and the Choice to Self-Insure Late-Life Risks," American Economic Review, American Economic Association, vol. 108(9), pages 2513-2550, September.
    2. Wojciech Kopczuk & Joseph P. Lupton, 2007. "To Leave or Not to Leave: The Distribution of Bequest Motives," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(1), pages 207-235.
    3. Bernheim, B Douglas, 1991. "How Strong Are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 899-927, October.
    4. Sloan, Frank A & Norton, Edward C, 1997. "Adverse Selection, Bequests, Crowding Out, and Private Demand for Insurance: Evidence from the Long-Term Care Insurance Market," Journal of Risk and Uncertainty, Springer, vol. 15(3), pages 201-219, December.
    5. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    6. Lin, Haizhen & Prince, Jeffrey, 2013. "The impact of the partnership long-term care insurance program on private coverage," Journal of Health Economics, Elsevier, vol. 32(6), pages 1205-1213.
    7. Lusardi, Annamaria & Mitchell, Olivia S., 2007. "Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 205-224, January.
    8. Hanming Fang & Michael P. Keane & Dan Silverman, 2008. "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 303-350, April.
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    More about this item

    Keywords

    private long-term care insurance; partnership long-term care program; policy response;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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