Joshua M. Wiener, Galina Khatutsky, Angela M. Greene, Trini Thach, and Benjamin Allaire
RTI International
Derek Brown
Washington University
July 30, 2015
ASPE Policy Forum
Contact Information
- Joshua Wiener jwiener@rti.org
- Angela M. Greene amg@rti.org
- Trini Thach tthach@rti.org
- Galina Khatutsky gkhatutsky@rti.org
- Benjamin Allaire ballaire@rti.org
- Derek Brown dereksbrown@wustl.edu
Disclaimer
- This research was supported by the Office of the Assistant Secretary for Planning and Evaluation/U.S. Department of Health and Human Services under Contract #HHSP23320100021WI.
- We gratefully acknowledge the contributions of Samuel Shipley, William Marton, Judith Dey, Pamela Doty, and John Drabeck to the design and analysis of the survey.
- The views expressed in this presentation are those of the authors and do not necessarily represent the views of the U.S. DHHS or RTI International.
Research Questions
- What is the general public’s knowledge, experience, and concerns about long-term services and supports?
- What are public’s preferences for a range of public policy options for long-term care financing reform?
- What are individuals’ preferences for specific key features of long-term care insurance policies and what are people willing to pay for these features?
Survey Background
- 2014 Survey of Long-Term Care Awareness and Planning, sponsored by the Office of the Assistant Secretary for Planning and Evaluation/U.S. Department of Health and Human Services (DHHS)
- Designed, cognitively tested, and analyzed by RTI International, with input from ASPE and TEP
- Fielded by GfK Custom Research, LLC
- Data collected August–September 2014
Data
- Two distinct survey components
- General survey items, including long-term care knowledge and experience, attitudes and concerns, preferences on public policy options for long-term care financing, and core sociodemographic characteristics
- Discrete Choice Experiment (DCE) involving choice of long-term care insurance policies with different features and prices
Survey Sample
Ongoing Internet panel maintained by GfK Custom Research KnowledgePanel®
Participation in panel by invitation only
Nationally representative sample of noninstitutionalized adults 40-70 years old residing in the United States
Weighted to represent general population age 40-70
LTSS Knowledge and Experience
Longevity Risk and Nursing Home Use Expectations
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Currently providing LTC To family member/friend
| Have you or has someone you know ever: | |
|---|---|
| required LTC because of a disability or illness? | 52.8% |
| received paid in-home care for ADLs? | 31.3% |
| been a resident in a nursing home/assisted living facility? | 44.2% |
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Knowledge of LTC Services and Costs
| Knowledge of LTC | % Correct |
|---|---|
| Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness. | |
| Cost of 1 month of nursing home care | 20.2 |
| Cost of 1 hour of home health aide care | 15.3 |
| Medicaid is primary government LTC payer | 25.3 |
| Average nursing home LOS < 5 years | 34.9 |
Knowledge of LTC Insurance
- Familiarity with LTC Insurance Policies
- LTC insurance premiums increase with age: 66.7% Correct
- Good health is generally required to purchase LTC insurance policy: 41% Correct
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
LTSS/LTCI Knowledge by LTSS Experience
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Longevity/Nursing Home Use Risk and LTCI Ownership by LTSS Experience
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
LTSS Concerns and Actions
Main Concerns About LTC
| Concerns | % Very/Somewhat Concerned |
|---|---|
| Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness. | |
| Losing independence | 90.6 |
| Being a burden on family | 83.5 |
| Losing control/choice over LTC | 83.3 |
| Being unable to afford high quality care | 82.0 |
| Using up savings/income | 81.1 |
| Becoming poor/relying on Medicaid | 78.9 |
| Being unable to depend on family/friends | 65.3 |
Number of Concerns About LTC
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Talking About LTC
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Preferred Actions if Need LTC
| If you became disabled, how willing would you be to do the following? | % Very Willing/Somewhat Willing |
|---|---|
| Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness. | |
| Make home modifications | 82.3 |
| Rely on spouse/family/friend | 75.0 |
| Have family/friend move in | 69.7 |
| Attend adult day care | 66.1 |
| Hire aide or agency for care | 64.0 |
| Move into assisted living facility | 62.4 |
| Hire live-in caregiver | 57.4 |
| Move in with children/family/friend | 48.5 |
| Use value in home to pay for LTC | 43.6 |
| Move into nursing home | 28.6 |
Willingness to Use Home Equity Among Homeowners
| Very Willing/Somewhat Willing N = 5,391 Percent (%) | |
|---|---|
| Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness. | |
| Total | 43.6 |
| Children None None within 10 miles One or more within 10 miles | 50.3 41.3 41.9 |
| Marital Status Married Unmarried | 42.1 47.7 |
| Household Savings and Assets No assets Less than $100,000 Greater than or equal to $100,000 | 32.7 42.1 46.9 |
Responsibility for LTSS and Financing Reforms
Attitudes Toward LTC Responsibility
- Responsibility for LTC
- 71.2% Strongly Agree/Agree: It is important to plan now for LTC services in the future
- 11.5%: Own private long-term care insurance policy
- 58.7% Strongly Agree/Agree: Responsibility of individuals to finance their LTC
- 17.4% Strongly Agree/Agree: Responsibility of children/family to finance LTC
- 37.1% Strongly Agree/Agree: Responsibility of government to help pay for LTC
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Trust of the Government and Insurers
- Attitude
- I do not trust government to run an LTC insurance program: 51.1% Strongly Agree/Agree
- I do not trust private insurers: 32.3% Strongly Agree/Agree
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Government Role in LTC Financing
| Government Should | % Strongly Agree/Agree |
|---|---|
| Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness. | |
| Allow LTC insurance purchase with IRAs and 401(k)s | 69.1 |
| Offer voluntary, public LTC insurance plan | 62.9 |
| Promote LTC through tax incentives | 62.4 |
| Pay LTC costs when insurance benefits run out | 40.9 |
| Establish mandatory, public LTC program | 18.4 |
| Require all people to purchase LTC insurance | 15.7 |
LTC Insurance Ownership
LTC Insurance Ownership by Age and Potential Informal Care by Children
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
LTC Insurance Ownership by Income and Assets
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Long-Term Care Awareness and Planning Survey Discrete Choice Experiment
Goals of the DCE Analysis
- Gather data on respondents’ preferences about long-term care insurance to better understand what factors are more and less important to them
- To test these preferences, we developed a series of paired comparisons of alternative long-term care insurance plans
Background and Methods
- DCE origins in marketing research:
- Given a choice of alternatives, what do people want?
- Why?
- How much do they want it?
- Data analysis:
- Conditional logit model (with clustering) of respondents’ stated choices for the final results
Overview of the DCE
- Form of conjoint analysis
- Used to estimate the relative importance that respondents place on the different features of an individual product
- Basic premise is that products or services can be characterized by a series of features or “attributes”
- Each attribute has a defined set of usually two to four levels or choices
Methods
Respondents to the DCE section of the survey completed two types of choice tasks
- SET I: Respondents evaluated plans described by six attributes
- daily benefit
- benefit period
- deductible period
- health requirements
- type of insurer (government or private insurer)
- premium cost
- SET II: Respondents evaluated plans described by seven attributes--the same six:
- daily benefit
- benefit period
- deductible period
- health requirements
- type of insurer (government or private insurer)
- premium cost
- ...plus:
- mandatory vs. voluntary enrollment
Asked to choose between plans A, B, and no insurance plan
Relative Preferences for LTC Insurance Plan Features: DCE 2
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Estimated Potential Market Demand: DCE1
- The preference estimates from the figures enter a statistical model that predicts choice behavior
- Given a choice between alternatives, what do respondents’ stated choices tell us about how many would pick each?
- Suppose respondents had only 2 options:
| No LTC Insurance | Basic LTC Insurance |
|---|---|
| $100 daily benefit amount | |
| 3 years of coverage | |
| No deductible | |
| Various prices |
Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.
Estimated Marginal Willingness to Pay for Changes in LTC Insurance Plans
- Economists frequently scale the figure of preference estimates earlier according to respondents’ sensitivity to price (marginal value of $)
- Doing so yields the following estimates of “willingness to pay”
- These represent a dollar estimate of how intensely a given LTC plan feature was valued by respondents
| Marginal Change | Estimate (DCE 2) |
|---|---|
| Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness. | |
| Daily benefit $300 (vs. $50) | $68.85 |
| Daily benefit $175 (vs. $50) | $55.68 |
| Daily benefit $100 (vs. $50) | $51.28 |
| Duration lifetime (vs. 1 year) | $175.38 |
| Duration 5 years (vs. 1 year) | $94.83 |
| Duration 3 years (vs. 1 year) | $85.37 |
| No deductible (vs. 6 months) | -$0.32 (NS) |
| 1 month deductible (vs. 6 months) | -$3.54 (NS) |
| 3 month deductible (vs. 6 months) | -$0.37 (NS) |
| No health requirements (vs. requirements) | $27.91 |
| Private insurer (vs. federal government) | $12.16 |
| Universal plan (vs. voluntary plan) | -$105.81 |
DCE summary
- Strongest preferences (in order) for
- Cost (monthly premium)
- Benefit period (“lifetime” highly desired)
- Voluntary enrollment
- Benefit amount (mostly to avoid to the lowest level)
- Potential demand for a basic LTCI plan only slightly about 50%, even at very low cost
- Preferences may reflect some lack of knowledge about LTC needs (e.g., lifetime benefit)
- Perceived negativity of required enrollment can be offset by improvements in other desired features
- Preference figure shows more & less effective policy levers
Conclusions
- Understanding of LTSS system is low, especially Medicaid; knowledge of LTC insurance basics is better
- Multiple concerns about becoming disabled, chief being losing independence
- People willing to use some services, but prefer free informal care to services that cost money
- Many people do not have firm opinions on how LTC should be financed, but most people think LTC is an individual, rather than government, responsibility
- People favor voluntary initiatives and support policies that promote private LTC insurance, although they also support voluntary public insurance
- Little support for mandatory public LTC insurance
- The most important LTC insurance features to consumers are plan cost, benefit period, and daily/monthly benefit amounts
- Deductible period, medical underwriting, and whether the insurer is private or government are less important
- With $50-100 per month of additional benefits or subsidy people would be indifferent regarding a mandatory public plan compared with a voluntary private insurance plan