Title | Late-in-Life Risks and the Under-Insurance Puzzle |
Publication Type | Report |
Year of Publication | 2016 |
Authors | Ameriks, J, Briggs, JS, Caplin, A, Shapiro, MD, Tonetti, C |
Series Title | NBER Working Paper Series |
Document Number | Working Paper No. 22726 |
Pagination | 1-62 |
Date Published | 10/2016 |
Institution | National Bureau of Economic Research |
City | Cambridge, MA |
Keywords | Affordable Care Act, Health Insurance, Health Shocks, Medicare/Medicaid/Health Insurance, Older Adults, Risk Factors, Social Security |
Abstract | Individuals face significant late-in-life risks, including needing long-term care (LTC). Yet, they hold little long-term care insurance (LTCI). Using both "strategic survey questions," which identify preferences, and stated demand questions, this paper investigates the degree to which a fundamental lack of interest and poor product features determine low LTCI holdings. It estimates a rich set of individual-level preferences and uses a life-cycle model to predict insurance demand, finding that better insurance would be far more widely held than are products in the market. Comparing stated and model-predicted demand shows that flaws in existing products provide a significant, but partial, explanation for this under-insurance puzzle. |
URL | http://www.nber.org/papers/w22726.pdf |
DOI | 10.3386/w22726 |
Citation Key | 8839 |