Crowding Out of Long‐Term Care Insurance: Evidence from European Expectations Data

Costa‐Font, Joan; Courbage, Christophe

doi:10.1002/hec.3148

Cited by 39 publications

(20 citation statements)

References 27 publications

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“…Even if an individual with private LTCI were eligible for Medicaid, the private insurance would pay first, and Medicaid would cover any remaining expenses. By contrast, Costa‐Font and Courbage () have analyzed data from 15 European countries and found evidence in favor of family crowding‐out, but no evidence of public sector crowding‐out.…”

Section: Literature Reviewmentioning

confidence: 96%

Interactions between Private Health and Long‐term Care Insurance and the Effects of the Crisis: Evidence for Spain

2016

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This paper analyzes the reasons for the scarce development of the private long-term care insurance market in Spain, and its relationship with health insurance. We are also interested in the effects the crisis has had both on the evolution of the demand for long-term care insurance and on the existence of regional disparities. We estimate bivariate probit models with endogenous variables using Spanish data from the Survey on Health and Retirement in Europe. Our results confirm that individuals wishing to purchase long-term care insurance are, in a sense, forced to subscribe a health insurance policy. In spite of this restriction in the supply of long-term care insurance contracts, we find its demand has grown in recent years, which we attribute to the budget cuts affecting the implementation of Spain's System of Autonomy and Attention to Dependent People. Regional differences in its implementation, as well as the varying effects the crisis has had across Spanish regions, lead to the existence of a crowding-in effect in the demand for long-term care insurance in those regions where co-payment is based on income and wealth, those that have a lower percentage of public long-term care beneficiaries, or those with a smaller share of cash benefits over total public benefits. Copyright © 2016 John Wiley & Sons, Ltd.

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Section: Literature Reviewmentioning

confidence: 96%

Interactions between Private Health and Long‐term Care Insurance and the Effects of the Crisis: Evidence for Spain

2016

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“…children) may adversely respond to these measures, exhibiting so‐called intergenerational moral hazard. One variant of intergenerational moral hazard is the weakening of social norms Costa‐Font and Courbage (). Potential caregivers, seeing that their recipients of care have income to afford the payment of LTC insurance premiums or to generate the necessary savings, may be less inclined to sacrifice their time and savings to provide support (Fehr and Schmidt, ; Costa‐Font, ).…”

Section: The Case For Long‐term Care Insurancementioning

confidence: 99%

Policy Dilemmas in Financing Long‐term Care in Europe

2016

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Long-term care (LTC) is the largest insurable risk facing the elderly in most high-income countries. Paradoxically, institutional responses to the need to insure ex ante (i.e. before the contingency occurs) the financial risks of needing LTC, either through social, private, or self insurance, exhibit limited development. In contrast, mechanisms to finance LTC ex post continue to develop, primarily those supported by the public sector (i.e. subsidies or tax deductions) and the family (i.e. intergenerational transfers). Both ex ante and ex post types of financing mechanisms are found to be subject to shortcomings which give rise to dilemmas for public policy. Governments confront these dilemmas in different ways, causing a great deal of heterogeneity in the financing and provision of LTC services across Europe.

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“…This allowance is paid to almost 10% of the Italian population over the age of 65. More generally, in Europe there is some evidence of family crowding out of private insurance (Costa-Font and Courbage, 2015) 3. STYLISED INTERPRETATIONS OF DIFFERENCES IN OECD COUNTRIES' LONG-TERM CARE FINANCING Figure 2 reveals substantial heterogeneity across the OECD countries in total and public LTC expenditures.…”

Section: Ex Post Financingmentioning

confidence: 99%

Financing Long‐Term Care: Ex Ante, Ex Post or Both?

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper examines the heterogeneity in the public financing of long-term care (LTC), and the wide-ranging instruments in place to finance long-term care services. We distinguish and classify the institutional responses to the need for LTC financing as ex-ante (occurring prior to when the need arises, such as insurance) and ex-post (occurring after the need arises, such as public sector and family financing). Then we examine country-specific data to ascertain whether the two types of financing are complements or substitutes. Finally, we examine exploratory cross-national data on public expenditure determinants, specifically economic, demographic and social determinants. We show that although both ex-ante and ex-post mechanisms exist in all countries with advanced industrial economies and despite the fact that instruments are different across countries, ex-ante and ex-post instruments are largely substitutes for each other. Expenditure estimates to date indicate that the public financing of long-term care is highly sensitive to a country's income, ageing of the population, and the availability of informal caregiving. Terms of use: Documents inJEL-Code: I180, H500, J100.

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Crowding Out of Long‐Term Care Insurance: Evidence from European Expectations Data

Cited by 39 publications

References 27 publications

Interactions between Private Health and Long‐term Care Insurance and the Effects of the Crisis: Evidence for Spain

Interactions between Private Health and Long‐term Care Insurance and the Effects of the Crisis: Evidence for Spain

Policy Dilemmas in Financing Long‐term Care in Europe

Financing Long‐Term Care: Ex Ante, Ex Post or Both?

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