The value of the coverage purchased also drops slightly with each additional year of aging. A much higher proportion of LTC policyholders are college educated than in the population as a whole. Income also is strongly associated with the purchase of LTC insurance and with a higher level of coverage. Surprisingly, the purchaser's total assets are not associated statistically with the purchase decision or the amount of coverage purchased. A major finding is how strongly Medicaid policy affects consumer decisions.
State policies regarding reimbursement of long-term care costs play a significant role.
The higher a state's Medicaid reimbursement rate, the greater the expected value of benefits purchased by an individual, the study found. This may reflect the fact that states with higher Medicaid reimbursement also have higher nursing home costs. Thus, purchasers in these states buy higher daily benefit amounts. Income limits for Medicaid eligibility did not seem to affect the amount of coverage purchased. Understanding the Factors behind the Decision to Purchase Varying Coverage Amounts of Long-Term Care Insurance.