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How much risk is mitigated by LTC Insurance? A case study of the public system in Spain

Author

Listed:
  • Montserrat Guillen

    (RFA-IREA, Departament d’Econometria, Estadística i Economia Espanyola, Avda. Diagonal 690, 08034 Barcelona)

  • Adelina Comas-Herrera

    (PSSRU, LSE Health and Social Care London School of Economics and Political Science)

Abstract

We present a methodology that allows to calculate the impact of a given Long-Term Care (LTC) insurance protection system on the risk of incurring extremely large individual lifetime costs. Our proposed methodology is illustrated with a case study. According to our risk measure, the current Spanish public LTC system mitigates individual risk by more than 30% compared to the situation where no public protection were available. We show that our method can be used to compare risk reduction of alternative LTC insurance plans.

Suggested Citation

  • Montserrat Guillen & Adelina Comas-Herrera, 2011. "How much risk is mitigated by LTC Insurance? A case study of the public system in Spain," Working Papers XREAP2011-07, Xarxa de Referència en Economia Aplicada (XREAP), revised Jun 2011.
    • Handle: RePEc:xrp:wpaper:xreap2011-07
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    References listed on IDEAS

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    Cited by:

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    4. J. Iñaki De La Peña & M. Cristina Fernández-Ramos & Asier Garayeta, 2021. "Cost-Free LTC Model Incorporated into Private Pension Schemes," IJERPH, MDPI, vol. 18(5), pages 1-16, February.
    5. Mercedes Ayuso & Montserrat Guillen & Jens Perch Nielsen, 2019. "Improving automobile insurance ratemaking using telematics: incorporating mileage and driver behaviour data," Transportation, Springer, vol. 46(3), pages 735-752, June.
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    7. Antonio Manresa & Ferran Sancho, 2012. "Leontief versus Ghosh: two faces of the same coin," Working Papers XREAP2012-18, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2012.

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