Family, Income, & Medicaid Policy: Multinomial Logistic Model of Long-Term Care Decisions

Providing care for older family members is a difficult and costly decision; in 2015, 34 million Americans provided care to an elder loved one (National Alliance for Caregiving & AARP Public Policy Institute, 2015). Formal long-term care (LTC) in a facility outside the home is expensive and caregivers that provide informal LTC at home may incur high opportunity costs, including limiting work hours or forgoing employment outside the home. Existing research focuses on this supply issue and ignores how characteristics of elders and their family members and Medicaid LTC policy jointly factor into the decision between formal and informal LTC. In this paper, I examine informal LTC in the context of all other alternatives for care (no care, informal LTC, formal LTC) and include demographic and economic measures of the elder care recipient and potential family caregivers as explanatory variables.