To estimate the maximum affordability and effect of this approach, all individuals or couples who can afford the policy for 5 percent or less of their income and who have at least $10,000 in nonhousing assets are assumed to purchase a policy at age 67. Age 67 was chosen because most elderly have left the work force by then and is living on their retirement income. In 1987 only 25 percent of men and 14 percent of women aged 67 were in the labor force. Since the elderly already spend about 12 percent of their income on health care, the 5-percentof-income test would mean a significant increase in out-of-pocket medical care costs for the elderly and is an assumption favorable to insurance. The $10,000-asset test assumes that few elderly will purchase insurance unless they have at least a modest level of assets to protect.