Long-Term Care Awareness and Planning: What Do Americans Want?. Long-Term Care Awareness and Planning Survey Discrete Choice Experiment

07/30/2015


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

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

Estimated Potential Market Demand: DCE1

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

 

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