TY  - JOUR
AU  - Brown,Jeffrey R.
AU  - Coe,Norma B.
AU  - Finkelstein,Amy
TI  - Medicaid Crowd-Out of Private Long-Term Care Insurance Demand: Evidence from the Health and Retirement Survey
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12536
PY  - 2006
Y2  - September 2006
UR  - http://www.nber.org/papers/w12536
L1  - http://www.nber.org/papers/w12536.pdf
N1  - Author contact info:
Jeffrey Brown
Department of Finance
University of Illinois at Urbana-Champaign
515 East Gregory Drive
Champaign, IL 61820
Tel: 217/333-3322
E-Mail: brownjr@illinois.edu

Norma B. Coe
Center for Retirement Research at Boston College
140 Commonwealth Ave
Chestnut Hill, MA 02467-3808
E-Mail: norma.coe.1@bc.edu

Amy Finkelstein
Department of Economics
MIT E52-274C
50 Memorial Drive
Cambridge, MA 02142
Tel: 617/253-4149
Fax: 617/868-2742
E-Mail: afink@mit.edu
M1  - published as Jeffrey R. Brown, Norma B. Coe, Amy Finkelstein. "Medicaid Crowd-Out of Private Long-Term Care Insurance Demand: Evidence from the Health and Retirement Survey," in James M. Poterba, editor, "Tax Policy and the Economy, Volume 21" MIT Press (2007)

AB  - This paper provides empirical evidence of Medicaid crowd out of demand for private long-term care insurance. Using data on the near- and young-elderly in the Health and Retirement Survey, our central estimate suggests that a $10,000 decrease in the level of assets an individual can keep while qualifying for Medicaid would increase private long-term care insurance coverage by 1.1 percentage points. These estimates imply that if every state in the country moved from their current Medicaid asset eligibility requirements to the most stringent Medicaid eligibility requirements allowed by federal law – a change that would decrease average household assets protected by Medicaid by about $25,000 – demand for private long-term care insurance would rise by 2.7 percentage points. While this represents a 30 percent increase in insurance coverage relative to the baseline ownership rate of 9.1 percent, it also indicates that the vast majority of households would still find it unattractive to purchase private insurance. We discuss reasons why, even with extremely stringent eligibility requirements, Medicaid may still exert a large crowd-out effect on demand for private insurance.
ER  -