Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/334650 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12294
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
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 document that exogenous wealth shocks significantly reduce the probability of LTCI coverage, without significantly altering Medicaid eligibility among owners of housing and financial assets. The effect of shocks to liquid wealth strongly dominates the effect of housing wealth changes. A $100K increase in housing (financial) wealth reduces the likelihood of LTCI coverage by 1.24 (3.22) percentage points.
Subjects: 
long-term care insurance
housing assets
Medicaid
house prices
stock market price index
instrumental variables
JEL: 
I18
J14
Document Type: 
Working Paper
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