Uninsured by choice? A choice experiment on long term care insurance

Akaichi, Faical, Costa-Font, Joan ORCID: 0000-0001-7174-7919 and Frank, Richard (2020) Uninsured by choice? A choice experiment on long term care insurance. Journal of Economic Behavior & Organization, 173. 422 - 434. ISSN 0167-2681

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Abstract

We examine evidence from two unique discrete choice experiments (DCE) on long term care insurance and values several of its relevant attributes. More specifically, the experiments examine choices made by a large sample made of 15,298 individuals in the United States with and without insurance. We study the valuation of a number of insurance attributes, namely the daily insurance benefit, insurance coverage, the compulsory and voluntary nature of the insurance policy design, alongside the costs (insurance premium) and health requirements. This paper elicits both respondents’ preferences and willingness to pay (WTP) for these care insurance's attributes using a random parameter logit model, and assesses the heterogeneity of choice responses using demographic, socioeconomic and attitudinal motivations to segment response to insurance choices. We find that an increase in the insurance premium by an additional $100 would reduce insurance uptake by 1pp. Insurance policy uptake is higher when it provides benefits for the lifetime (the monthly marginal WTP being $178.64), and voluntary (the monthly marginal WTP increases by an extra $74.71) as opposed to universal, and when it forgoes health checks (the monthly marginal WTP increases by an extra 28US$).

Item Type:	Article
Official URL:	https://www.sciencedirect.com/journal/journal-of-e...
Additional Information:	© 2019 Elsevier B.V
Divisions:	Health Policy
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health I - Health, Education, and Welfare > I3 - Welfare and Poverty > I31 - General Welfare; Basic Needs; Living Standards; Quality of Life; Happiness
Date Deposited:	23 Jul 2019 10:30
Last Modified:	16 Apr 2024 07:51
URI:	http://eprints.lse.ac.uk/id/eprint/101215

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