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Long-Term Care Partnership Effects on Medicaid and Private Insurance

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  • Costa-Font, Joan

    (London School of Economics)

  • Raut, Nilesh

    (London School of Economics)

Abstract

Can the expansion of Medicaid, a means-tested health and long-term care insurance, be slowed down by incentivising the purchase of private long-term care insurance (LTCI)? We study the implementation of the long-term care insurance partnership (LTCIP) program, a joint federal and state-level program that intended to promote LTCI coverage. Drawing on a difference-in-differences (DD) design we study the effect of the rollout of the LTCIP program between 2005 and 2016 on both LTCI uptake and Medicaid eligibility, and we estimate the effect on Medicaid savings. Drawing on a difference-in-differences (DD) design, we find that, unlike previous estimates, the introduction of the LTCIP does significantly increase LTCI coverage and reduce the uptake of Medicaid. The effects are driven by the introduction of LTCIP in states after 2010. We estimate that the adoption of LTCIP has given rise to an average Medicaid saving of $36 for every 65-year-old. This suggests scope for LTCI arrangements to reduce Medicaid spending.

Suggested Citation

  • Costa-Font, Joan & Raut, Nilesh, 2021. "Long-Term Care Partnership Effects on Medicaid and Private Insurance," IZA Discussion Papers 14753, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14753
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    Cited by:

    1. Jonathan Gruber & Kathleen McGarry, 2023. "Long-Term Care in the United States," NBER Chapters, in: Long-Term Care around the World, National Bureau of Economic Research, Inc.

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    Keywords

    long-term care partnerships; long-term care insurance; Medicaid; United States; difference-in-differences;
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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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