Managed competition with prefunding: the solution for long-term care?
Managed competition with prefunding could be a useful approach to long-term care. One version, described here, has two main components: First, people would be required to save over their working lives to cover a portion of the expected cost of a minimum required level of long-term-care insurance. Second, people would begin purchasing long-term-care insurance around the time of retirement from one of a number of competing insurers, under a system of managed competition. Potentially large social gains would arise from improving insurance arrangements, distributing long-term-care costs more equitably across and within generations, and eliminating many of the distortions inherent in the current Medicaid program.
Lucas
D
D
Northwestern University, Kellogg Graduate School of Management, Evanston, IL 60208, USA. d-lucas@nwu.edu
D006801:Humans; D007342:Insurance Benefits; D007353:Insurance, Long-Term Care; D008134:Long-Term Care / Q000191:economics*; D018854:Managed Competition / Q000191:economics*; D008484:Medicaid / Q000191:economics; D014481:United States