What We Know About Buyers and Non-Buyers of Private Long-Term Care Insurance: A Review of Studies. A. Study Descriptions


Each of the studies reviewed here focus on one of two sample groups from distinct markets: (1) the individual market and, (2) the group market -- typically employer or group association. While the individual market comprises the bulk of LTC insurance sales -- roughly 85% -- the group market has shown the greatest rates of growth over the past five years. Of the 15 studies included in this review, six focus on the group market and the other nine examine purchase trends in the individual market.

The Health Insurance Association of America (HIAA) conducted descriptive studies of LTC insurance buyers and non-buyers in the employer group market in 1990 and 2001. The sample was drawn from eleven employers. These studies provide descriptive analyses on more than 3,800 employed buyers and non-buyers of group LTC insurance. Stum et al. (2001) analyzed the purchase decision of 830 employees of the State of Minnesota and the University of Minnesota who in the fall of 2000 were offered group LTC insurance. The study provides both descriptive and empirical analyses. In 2000, the American Council of Life Insurers (ACLI) conducted a study of roughly 500 individuals across a number of different employers that focused on the link between retirement planning and the purchase of insurance (ACLI, 2001). In 1999, the Long Term Care Group (LTCG) studied the buying behavior of 500 buyers and 500 non-buyers of the CalPERS program with respect to LTC insurance in response to their 1998 campaign. Finally, a recent study of purchase behavior among federal employees represents the largest group surveyed with more than 10,000 individuals participating in the study (DHHS, 2003a).

The remaining nine studies focus on the buying behavior of retirees. Six of these studies provide descriptive analyses and three provide empirical analyses. The descriptive studies are the 1986/87 AARP study, the 1990, 1995 and 2000 HIAA studies, the ACLI study and the Ritchey et al (1991) study. The 1986/87 AARP study looks at the purchase decision of 3,900 AARP members ages 55 to 79, who in 1985 and in 1986 were offered LTC insurance covering care at home or in a nursing home. The HIAA individual studies and the ACLI study draw their samples of more than 15,000 buyers and non-buyers age 55 and over, from between eight to ten of the largest LTC insurance companies selling policies. Ritchey et al. (1991) surveyed roughly 600 randomly selected retired teachers in Ohio who became eligible in July 1990 to purchase LTC insurance through the State Teachers Retirement System of Ohio. The three empirical studies that examine the purchase decision of retirees include: Lee (1999), McCall et al. (1998) and Kumar et al. (1995). Lee (1999) uses data from the Asset and Health Dynamics Among the Oldest Old survey comprised of 7,200 individuals age 70 and over. McCall et al. (1998) focus on identifying the factors that are important determinants of the purchase of Partnership policies. The Partnership program was an initiative of the Robert Wood Johnson Foundation and four states -- California, Connecticut, New York and Indiana -- that combined private and public (Medicaid) insurance for the financing of LTC. The program was designed to promote the sale of LTC insurance to middle-income customers. The 1,050 non-purchasers in the sample were between the ages of 55 and 75 and the 1,467 purchasers were selected at random. Finally, Kumar et al. (1995) base their empirical analysis on the 1995 HIAA study of retirees age 55 and over. All of the studies use logistic regressions to identify the factors that have an impact on the probability of buying LTC insurance.

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