DETERMINANTS OF LONG-TERM CARE INSURANCE: ARE SPOUSES SUBSTITUTES?

As the U.S. population continues to age due to medical advancements and the aging of the
largest generation in the history of the U.S. (baby boomers), the number of people in long-term
care facilities has increased significantly; however, the percentage of people with long-term care
insurance is small. Research conducted in the early 2000s focused on factors such as availability
of children, risk aversion, health status, age, having Medicaid, and other variables that describe
personal attributes to explain why the market is so small. This paper will use recent data from the
Health and Retirement Study to determine whether or not having a living spouse is a substitute
for having long-term care insurance. In particular I investigated this question for those classified
as middle baby-boomers. I found that being married has a positive and statistically significant
impact on the whether or not an individual has long-term care insurance.