Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319650 
Year of Publication: 
2025
Series/Report no.: 
HCHE Research Paper No. 31
Publisher: 
University of Hamburg, Hamburg Center for Health Economics (HCHE), Hamburg
Abstract: 
The German universal long-term care (LTC) insurance program offers beneficiaries the choice between in-kind services and a cash benefit, which can be used for anything, including informal care. The optimal level of the cash benefit de- pends on substitution between formal and informal care options, the cost of public funds, and distributional considerations. To evaluate various policy options, we estimate a randomcoefficients demand model for the period 1999-2015 using data on the universe of LTC patients supplemented with micro moments from the German Mikrozensus. Results show strong heterogeneity in patient preferences for the three different LTC options: informal, ambulatory and stationary care. Acounterfactual analysis predicts that abolishing the cash subsidy leads to a decline in patient sur- plus that far outweighs the savings in public expenditure. It suggests that many countries could benefit from the introduction of a cash subsidy option for LTC.
Subjects: 
Aging
long-term care
insurance
informal care
Document Type: 
Working Paper

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