Type

Text

Type

Dissertation

Advisor

Dwyer, Debra. | Rizzo, John | Montgomery, Mark | Rachev, Svetlozar.

Date

2017-08-01

Keywords

Economics

Department

Department of Economics.

Language

en_US

Source

This work is sponsored by the Stony Brook University Graduate School in compliance with the requirements for completion of degree

Identifier

http://hdl.handle.net/11401/78185

Publisher

The Graduate School, Stony Brook University: Stony Brook, NY.

Format

application/pdf

Abstract

Given the highly uncertain nature of health in the later stages of life a large private long-term care insurance market is predicted, but not evident with only 14.2% of those over 60 participating in 2009 (Ujvari, 2012). The government provides a substitute for long term care insurance for those who are eligible, and because eligibility for Medicaid can be a choice, it offers a low cost substitute for private insurance. In this work we demonstrate that it has become the preferred choice for many middle income Americans, who are not the target for this program. In the first chapter we have made several contributions. Often policy analyses aimed at quantifying take-up of benefits and impact among those eligible for benefits begin by identifying the eligible pool for benefits. This has proven to be a challenge in the literature given the complexities associated with determining eligibility for Medicaid among the elderly. We contribute to the literature by using a rich panel data that allows us to examine asset transfer behavior and Medicaid take-up in an attempt to identify the size and attributes of suspects for Medicaid abuse through endogenous eligibility. We have also developed an empirical model to test hypotheses regarding choices by type among individuals who are actively in the market for LTCI. My hypotheses stem from a choice model that yields two key variables of interest: one is adverse selection and the other one is risk aversion. In chapter two and three we study the timing of the transfer behavior and Medicaid take up to consider factors that precipitate these events as well as how they relate to each other. First, we capture underlying commonalities among different indicators to pick up the important latent attributes of those who are at risk for endogenous adopter behavior. We conduct factor analysis to allow for collinearity among covariates that may have an impact on being at risk for this behavior. Second, we use a Markov model to identify the different paths that lead to the decision of transferring their property to their children as well as the transition probabilities that would predict this behavior. Finally, we identify the main determinants that would trigger Medicaid take up among those who have transferred their property while adjusting for a set of relevant covariates, using a competing risk model. | 107 pages

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