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The Impact of Policy Incentives on Long-Term Care Insurance and Medicaid Costs: Does Underwriting Matter?
- Source :
- Health Services Research; Oct2018, Vol. 53 Issue 5, p3728-3749, 22p, 17 Charts, 1 Graph, 1 Map
- Publication Year :
- 2018
-
Abstract
- <bold>Objective: </bold>To test whether underwriting modifies the effect of state-based incentives on individuals' purchase of long-term care insurance.<bold>Data Source: </bold>Health and Retirement Study (HRS), 1996-2012.<bold>Study Design: </bold>We estimated difference-in-difference regression models with an interaction of state policy indicators with individuals' probabilities of being approved for long-term care insurance.<bold>Data Extraction: </bold>We imputed probabilities of underwriting approval for respondents in the HRS using a model developed with underwriting decisions from two U.S. insurance firms. We measured the elasticity response to long-term care insurance price using changes in simulated after-tax price as an instrumental variable for premium price.<bold>Principal Findings: </bold>Tax incentives and Partnership programs increased insurance purchase by 3.62 percentage points and 1.8 percentage points, respectively, among those with the lowest risk (highest approval probability). Neither had any statistically significant effects among the highest risk individuals.<bold>Conclusions: </bold>We show that ignoring the effects of underwriting may lead to biased estimates of the potential state budget savings of long-term care insurance tax incentives. If the private market is to play a role in financing long-term care, policies need to address the underlying adverse selection problems. [ABSTRACT FROM AUTHOR]
- Subjects :
- LONG-term care insurance
MEDICAID costs
HEALTH insurance
INSURANCE
INSURANCE companies
HEALTH insurance costs
ECONOMIC impact
MEDICAID
HEALTH policy
LONG-term health care
PRIVATE sector
COMPARATIVE studies
DISCRIMINATION in insurance
RESEARCH methodology
MEDICAL cooperation
RESEARCH
RESEARCH funding
TAXATION
EVALUATION research
STATISTICAL models
STATE health plans
IMPACT of Event Scale
ECONOMICS
Subjects
Details
- Language :
- English
- ISSN :
- 00179124
- Volume :
- 53
- Issue :
- 5
- Database :
- Complementary Index
- Journal :
- Health Services Research
- Publication Type :
- Academic Journal
- Accession number :
- 131949477
- Full Text :
- https://doi.org/10.1111/1475-6773.12870