Advantages of Long Term Care Insurance Page 6

It is difficult to judge precisely the extent of the moral hazard problem. The disabled elderly are overwhelmingly cared for by relatives and not by paid providers. About 41 percent of the disabled elderly were receiving paid home care or nursing home care in 1985. Many additional people who could “medically qualify” for paid services are not receiving any. The increase in use could especially be a problem if families stopped providing care and depended on paid services to fill the gap. Some studies have found use of nursing home care to be quite sensitive to price.

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