Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128642
Authors: 
Fels, Markus
Year of Publication: 
2016
Series/Report no.: 
Working Paper Series in Economics, Karlsruher Institut für Technologie (KIT) 84
Abstract: 
I consider the popular argument of Medicaid crowding out demand for private long-term care insurance. I show that this argument rests on a wrong counterfactual comparison. Furthermore, I question the welfare-decreasing impact of Medicaid as it neglects a large value of the program in providing access to care. I show that private insurance is unable to offer a similar value. I posit that the low take-up of private insurance is due to a dilemma prevalent in - but not exclusive to - the market for long term care insurance: a dilemma between access and affordability. Several empirical patterns in insurance uptake and lapsing behavior can be explained by considering the issue of limited affordability.
Subjects: 
Aging
Insurance
Long term Care
Medicaid
JEL: 
G22
I11
I38
Document Type: 
Working Paper

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