Eliciting the demand for long-term care coverage: a discrete choice modelling analysis.

Area of Science:

• Health Economics
• Insurance Markets
• Behavioral Economics

Background:

• Long-term care (LTC) is a growing concern, yet systematic insurance coverage remains limited.
• Understanding consumer demand is crucial for designing effective LTC insurance products.
• Existing research often lacks detailed insights into the specific attributes influencing LTC insurance choices.

Purpose of the Study:

• To evaluate demand for long-term care (LTC) insurance prospects within a stated preference framework.
• To determine the relative importance of various characteristics defining hypothetical LTC insurance programs.
• To elicit willingness to pay (WTP) for different LTC coverage options.

Main Methods:

• A choice experiment was conducted on a representative sample of the Emilia-Romagna population.
• A nested logit model with 'partial degeneracy' was applied to analyze preferences.
• The study modeled determinants of preference for the status quo (no LTC coverage).

Main Results:

• The relative importance of specific LTC insurance attributes was identified.
• Willingness to pay estimates for various LTC coverage scenarios were elicited.
• Socio-demographic variables and health status indicators were found to influence choices regarding LTC insurance and status quo preference.

Conclusions:

• The study provides empirical evidence on factors driving demand for LTC insurance.
• Findings can inform policymakers and insurers in developing and marketing suitable LTC coverage.
• Understanding individual preferences is key to addressing the challenge of long-term care financing.