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Long-Term Care Awareness and Planning: What Do Americans Want?

Publication Date

Joshua M.​ Wiener, Galina Khatutsky, Angela M. Greene, Trini Thach, and Benjamin Allaire
RTI International

Derek Brown
Washingt​on University

Jul​y 30, 2015
ASPE Policy Forum

 

Contact Information


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

Ongoing Internet panel maintained by GfK Custom Research KnowledgePanel

Weighted to represent general population age 40-70


 

LTSS Knowledge and Experience


Longevity Risk and Nursing Home Use Expectations

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

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 care20.2
Cost of 1 hour of home health aide care15.3
Medicaid is primary government LTC payer25.3
Average nursing home LOS < 5 years34.9

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

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

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 independence90.6
Being a burden on family83.5
Losing control/choice over LTC83.3
Being unable to afford high quality care82.0
Using up savings/income81.1
Becoming poor/relying on Medicaid78.9
Being unable to depend on family/friends  65.3

Number of Concerns About LTC

Number of Concerns About LTC

Source: RTI International Analysis of the 2014 Survey of Long-Term Care Planning and Awareness.


Talking About LTC

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 modifications82.3
Rely on spouse/family/friend75.0
Have family/friend move in69.7
Attend adult day care66.1
Hire aide or agency for care64.0
Move into assisted living facility62.4
Hire live-in caregiver57.4
Move in with children/family/friend48.5
Use value in home to pay for LTC43.6
Move into nursing home28.6

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.
Total43.6
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)s69.1
Offer voluntary, public LTC insurance plan62.9
Promote LTC through tax incentives62.4
Pay LTC costs when insurance benefits run out40.9
Establish mandatory, public LTC program18.4
Require all people to purchase LTC insurance15.7

LTC Insurance Ownership


LTC Insurance Ownership by Age and Potential Informal Care by Children

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

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

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 InsuranceBasic 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 ChangeEstimate (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
Populations
Older Adults | Caregivers