Co-payments for Elderly Care
“The financial risks of nursing home care are greatest for low-income individuals”
There are vast differences in the amount of coinsurance seniors have to pay for elderly care. In general, low-income care recipients spend a greater proportion of their income on coinsurance than higher-income recipients. The coinsurance rates for nursing home care, in particular, represent a financial risk for older individuals with a low income. This group needs more long-term care, especially more nursing home care.
Key Takeaways for the Industry
- Co-payment rates for long-term care contribute substantially to financial risk after retirement.
- A greater understanding of behavioral effects is needed to improve the design of coinsurance.
- Measures to encourage home care by means of coinsurance lead to a relatively high financial burden for low-income seniors who can not arrange in-home for themselves.