Medical Underwriting: A Factor in Long-Term Care Insurance Market Demand

Medical underwriting policies are designed to prevent individuals from purchasing long-term care insurance (LTCI) at a time they are most likely to require these services. There is little agreement among researchers regarding the best way to increase the market demand for private LTCI, which would reduce the number of individuals at risk for high out-of-pocket costs. Researchers do tend to agree that Medicaid, premium cost, lack of awareness, and product complexities lower the demand for LTCI. The purpose of this quantitative study was to investigate the prevalence of health and lifestyle risk factors associated with medical underwriting, and the relationship of these factors to limiting the potential size of the private insurance market. The theoretical foundation for this study was both Andersen's model of health services utilization and Akerlof's asymmetric information theory. Data were gathered from Wave 10 of the Health and Retirement Study (HRS), a nationally representative dataset, using purposeful sampling to select 12,666 respondents and spouses, ages 51 and older, without LTCI. Descriptive analysis and a nonparametric 1-way chi-square test indicated the presence of at least 1 risk factor in 95.76% of the sample, 2.72 risk factors per participant in the age group of 51-54, and 4.23 risk factors for participants in the age group of 74-84. Quantitative findings indicated that risk factors associated with medical underwriting affect a sizable proportion of US adults, ages 51 and older. The implications for social change include informing policymakers of the impact of medical underwriting on older adults seeking LTCI for financial security.