Preferences for in-kind and in-cash home care insurance.

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Date: July 2022
Publisher: Elsevier B.V.
Document Type: Report
Length: 416 words

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Abstract :

Keywords Long-term care insurance; Home care; Willingness to pay; Discrete choice experiment; Saving motives; Health expectations Highlights * We measure willingness to pay (WTP) for different types of home care insurance. * Majority value in-kind and in-cash home care insurance above the actuarial premium. * WTP is heterogeneous and decreases on average with the amount of coverage. * For in-kind care, WTP varies with circumstances, preferences, and expectations. * In contrast, in-cash support is valued regardless of respondent characteristics. Abstract We study preferences for different types of home care insurance using a discrete choice experiment. We consider domestic, personal, and social care, a home care annuity, and a lump-sum for home adaptations. To understand variation in preferences, we relate willingness to pay to personal circumstances, preferences, and expectations. We find that the majority value in-kind and in-cash insurance above the actuarial premium. While most respondents value coverage for basic levels of support, we find diminishing marginal utility for higher levels of support. For in-kind care, willingness to pay is positively associated with respondent characteristics: being single, household income, home ownership, risk aversion, low bequest motives, expected length of home care use, expected expenditures when in need of care, and low expected availability of informal care. In contrast, in-cash support is valued regardless of respondent characteristics, possibly because its inherent flexibility. These results contribute to the design of insurance schemes for home care. Author Affiliation: (a) Tilburg Universiy, P.O. Box 90153, Tilburg 5000 LE, the Netherlands (b) Leiden University, P.O. Box 9520, Leiden 2300 RA, the Netherlands (c) University of Groningen, University Medical Center Groningen, P.O. Box 30001, Groningen 9700 RB, the Netherlands * Corresponding author. Article History: Received 9 July 2021; Revised 9 April 2022; Accepted 25 April 2022 (footnote)[white star] The authors thank the editor, Luigi Siciliani, and two anonymous referees for helpful comments, and Netspar for support. In addition, the authors are grateful to the comments and suggestions by Esther de Bekker-Grob, Raymond Montizaan, Bram Wouterse, Ceu Mateus, Erik French, Giacomo Pasini, Pascal St-Amour, and seminar and conference participants at the Ca' Foscari University of Venice, Univerity of Groningen, Tilburg University, European Health Economics Association conference, International Health Conference, Lowlands Health Economic Study Group conference, and Netspar International Pension Workshop. Jochem de Bresser gratefully acknowledges financial support of the research programme Innovational Research Incentives Scheme Veni with project number 451-15-018, which is financed by the Netherlands Organisation for Scientific Research (NWO). Byline: Jochem de Bresser (a), Marike Knoef (a,b), Raun van Ooijen [r.van.ooijen@umcg.nl] (*,c)

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Gale Document Number: GALE|A709525726