Question

1) Some have proposed that more children would be enrolled in CHIP (or Medicaid) if their parents could also be enrolled. Leaving aside the issue of the extent to which children would enjoy first-time coverage, what effect would this have on parental coverage? How large a crowd- out effect would you anticipate? 2) Suppose you are a reasonably wealthy individual. Under what circumstances would you buy long-term care insurance rather than investing in other assets?

Answer 1

1) Parents need to have long-term coverage. If the Medicaid has modified the plan, then it will increase the burden on Parental coverage. Parents of the low-income group have to be enrolled first in Medicaid coverage to get larger benefits for the child. If the Medicaid has not expanded the program, then the preventive services have not been covered which increases the additional burden. Maximum benefit of coverage will go to the children than parents. It anticipates to crowd out of effect on the wealth of the parent. It creates contraversion of insurance decision among the family members.

2) Investment on long term care helps to maintain independent at elder age, able to get an affordable quality of care and reduces the financial burden in unexpected events. It is cost-benefit and relieves the stress of family members. It reduces financial risk after retirement. It helps to manage the premiums, preserve the assets, and to balance the savings.