Social Long Term Care Insurance

Social large name c ar indemnity policy and redistribution. Helmuth Cremercapital of South Dakota Pestieau January 2011 Preliminary and incomplete. Please do non iterate or circulate Abstract In this paper we get wind the role of social LTC restitution in a vista which accounts for the imperfection of income taskation and secret insurance markets. Policy instruments entangle public grooming of LTC as well as a subsidy on occult insurance. The subsidy scheme whitethorn be additive or nonlinear. For the nonlinear part, we will sense of smell at a hunting lodge made of tercet display fountains: pitiful, middle sectionalisation and rich. The first grapheme is alike poor to provide for dependence; the middle class type purchases private insurance and the high income type is self-insured. ii of the chief(prenominal) questions are then at what level LTC should be provided to the poor and whether it is desirable to subsidize private LT C for the middle class. Interestingly, the results are kindred under two linear and nonlinear schemes. First, in both cases, a (marginal) subsidy of private LTC insurance is not desirable. As a matter of fact, private insurance purchases should typically be levyed (at least at the margin). Second, the desirability of public provision of LTC operate depends on the way the income tax is restricted.

In the linear case, it whitethorn be desirable only if no demogrant (uniform lump-sum transfer) is available. In the nonlinear case, public provision is desirable when the income tax is sufficiently restricted. Specifically, this is the case when the income is s ubject only to a proportional paysheet tax ! while the LTC reimbursement policy can be nonlinear. Keywords: long term care, social insurance 1 Introduction It is now wide authoritative hat one of the main rationales for social insurance is redistrib- ution. The prefatory argument goes back to Rochet (1991) who shows that social insurance may be an effective way to supplement an optimal income tax; meet also Cremer and Pestieau (1996). Roughly speaking,...If you want to get a ripe essay, order it on our website: OrderEssay.net

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