New Approaches to Long-Term Care Access for Middle-Income Households

Michael Ellenbogen

Today, Milken Institute released, "New Approaches to Long-Term Care Access for Middle-Income

Households," outlining how the public and private sectors can expand LTC access for middle-income

Americans. https://bit.ly/3mq9LXZ

Crushed

I am dreadfully afraid that this is another "stratopatisserie" proposal. 

The rocks that all long term care proposals founder on are Moral hazard and adverse selection and free labor

Moral hazard  is the lack of incentive to guard against risk where one is protected from its consequences, e.g. by insurance.

 

 

 

 

 Adverse selection occurs in health insurance when there is an imbalance of high-risk, sick policyholders to healthy policyholders. The imbalance can happen due to sick individuals, who require more insurance, using more coverage and purchasing more policies than the healthy individuals, who need less coverage and may not buy a policy at all.

 

  

       In the case of long term care the key support of the current system is "free labor" by  family members who are coerced into care by the prospect of  terrible institutional care for the loved ones.  States in effect have a race to the bottom in providing poor care.  The more horrible the institutional arrangements the more likely the patients stay home or move to other states. 

 

    

Donr

Thank you Michael for the post.

Ed1937

Another good thread, Michael. Thanks.