What We Know About Buyers and Non-Buyers of Private Long-Term Care Insurance: A Review of Studies. H. Converting Non-Buyers to Buyers

08/01/2004

It is evident from recent federal and state activity that the public sectors support growth in the private LTC insurance market. While the LTC insurance market grew dramatically in the last decade, fewer than 10% of all elderly Americans and an even smaller percent of working age Americans have coverage. Finding out what would make the product more attractive to consumers or what would make consumers more attracted to the product is, therefore, very important. Given that most non-buyers cite cost as an important barrier to purchase, it is not surprising that when asked, most non-buyers (across all studies) say that they would be much more interested in buying a policy if it was cheaper. As well, most non-buyers indicate that they would be more likely to purchase a policy if the government also participated in a "partnership-type" arrangement (e.g., pay benefits after private insurance runs out), or if they perceived that they were at higher risk for needing protection.

To gauge whether there have been changes over time in the attitudes of non-buyers, we present findings from the 1995 and 2000 HIAA surveys of non-buyers. The results displayed in Figure 2 indicate that non-buyers would be much more interested or more interested in buying insurance if (a) the premiums could be deducted from taxes; (b) if the government were to provide a stop-loss coverage once their private insurance benefits run out, and (c) if premiums do not increase over time. These results are consistent with findings among non-buyers in the federal market (DHHS, 2003b). In the year 2000, non-buyers also indicated that they would be much more likely to buy if the government sponsored an insurance plan and offered it to its employees. Given that this is precisely what has taken place, one can expect some positive impact on the buying behavior of individuals not associated with the federal family.

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