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Determinants of Private Long‐Term Care Insurance Purchase in Response to the Partnership Program
Author(s) -
Lin Haizhen,
Prince Jeffrey T.
Publication year - 2016
Publication title -
health services research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.706
H-Index - 121
eISSN - 1475-6773
pISSN - 0017-9124
DOI - 10.1111/1475-6773.12353
Subject(s) - financial literacy , actuarial science , sample (material) , business , asset (computer security) , general partnership , panel data , bequest , long term care insurance , variables , term (time) , long term care , finance , economics , medicine , nursing , econometrics , law , chemistry , physics , computer security , chromatography , quantum mechanics , machine learning , computer science , political science
Objective To assess three possible determinants of individuals' response in their private insurance purchases to the availability of the Partnership for Long‐Term Care ( PLTC ) insurance program: bequest motives, financial literacy, and program awareness. Data Sources The health and retirement study ( HRS ) merged with data on states' implementation of the PLTC program. Study Design Individual‐level decision on private long‐term care insurance is regressed on whether the PLTC program is being implemented for a given state‐year, asset dummies, policy determinant variable, two‐way and three‐way interactions of these variables, and other controls, using fixed effects panel regression. Data Extraction Methods Analysis used a sample between 50 and 69 years of age from 2002 to 2010, resulting in 12,695 unique individuals with a total of 39,151 observations. Principal Findings We find mild evidence that intent to bequest influences individual purchase of insurance. We also find that program awareness is necessary for response, while financial literacy notably increases responsiveness. Conclusions Increasing response to the PLTC program among the middle class (the stated target group) requires increased efforts to create awareness of the program's existence and increased education about the program's benefits, and more generally, about long‐term care risks and needs.