Policy Perspectives Logo

The Journal of the Trachtenberg School of Public Policy and Public Administration at The George Washington University


This paper examines the current market for the New York State Partnership for Long-Term Care (NYSPLTC), a public-private partnership designed to encourage private insurance purchase. The potential market for long-term care insurance (LTCI) is analyzed based on market participants' ability to afford Partnership policies. Data from the U. S. Census and the NYSPLTC creates a demographic profile of potential purchasers. This profile identifies the subsets of the population who currently benefit from the policy and those who are eligible but not participating. The Partnership is not necessarily the best use of government resources because it may increase inequitable distribution of societal resources and may not create significant benefits to offset its costs. The policy subsidizes the cost of care for some who could fully pay, rather than dedicating limited resources to providing care for the poor. This trade-off is made under the assumption that strengthening the private LTCI market will eventually reduce reliance on publicly funded care. Long-term care financing is a market failure, as individuals do not presently have the proper incentives to make provision for the cost of possible end-of-life health and social care needs. This market failure must be dealt with in light of predicted increases in cost and increased usage of long-term care by the oldest old, our nation's fastest-growing demographic.

Full Text