Determinants of Policy Response: The Case of the Partnership Long-Term Care Insurance Program

Abstract

The Partnership long-term care (PLTC) insurance program is a major initiative partnering state Medicaid programs and private insurers in an attempt in increase take-up of long-term care insurance by older Americans. Prior work has shown that, while the program is aimed at middle-wealth individuals, it is only wealthy individuals who are participating. Any attempt to alter the participating demographics must be informed by the determinants of individuals’ participation (beyond just their wealth) in order to be successful. In this paper, we assess several possible determinants of participation in the PLTC program – bequest motives, financial literacy, and program awareness. We find mild evidence that intent to bequest influences individual purchases of the partnership program. However, we find strong evidence that program awareness is necessary for response while financial literacy notably increases responsiveness. These findings suggest that increasing response to the program among the middle class (the stated target group) requires increased education about the program’s benefits and increased efforts to create awareness of the program existence, at least among the middle class.