Work

The effects of wealth shocks on public and private long-term care insurance

Year: 2025

Type: article

Abstract: The financing of long-term care services and supports (LTSS) relies heavily on self-insurance in the form of housing or financial wealth. Exploiting both local market variation in housing prices and individual-level variation in stock market wealth from 1996 to 2016, we show that exogenous wealth shocks significantly reduce the probability of LTCI coverage, without altering Medicaid eligibility among people with housing and financial assets. The effect of shocks to liquid wealth strongly dominates the effect of housing wealth changes. A $100 K increase in housing (financial) wealth reduces the likelihood of LTCI coverage by 1.24 (3.22) percentage points.

Source: Journal of Health Economics

DOI: 10.1016/j.jhealeco.2025.103086

Authors: Joan Costa-Font, Richard G Frank, Nilesh Raut

Institutions: London School of Economics and Political Science, Brookings Institution

Language: English

Topic: Healthcare Policy and Management

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: No poverty, Good health and well-being, Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $4,260