Funding for Long-Term Care: Why Public Insurance Makes Sense

Adams and Vanin (2016) build a strong case for public support for private insurance in long-term care. Their main argument is that public coverage is not politically feasible. I start with summing up and criticizing their argument. The gist of my criticism is that the success of their plan requires some kind of selection (not everybody buys coverage), and selection is precisely why private insurance does not work for long-term care. I then reframe my preferred policy option: a public scheme financed out of a flat rate or sales tax.