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Policy implications of an annuity approach to integrating long-term care financing and retirement income.
J Aging Health 2003; 15(1):45-73JA

Abstract

The authors consider an integrated income and disability annuity as an alternative framework for long-term care financing, show that pooling disability and mortality risks can reduce the need for medical underwriting, and discuss private and public implications. Data from the National Mortality Followback Survey of 1986 were used to simulate current underwriting and minimal underwriting, excluding only those already eligible for benefits. Remaining disability, life expectancy, and premiums are compared under both underwriting assumptions. Under minimal underwriting, 98% of persons age 65 would be eligible to purchase disability protection through an integrated annuity, versus 77% under current underwriting. Premiums for both the income and disability components were lower with minimal underwriting. Combining income and disability protection may be able to expand private markets for long-term care financing beyond what appears possible in the long-term care insurance market. Public policy should avoid the distortion of choices created by focusing exclusively on an insurance model.

Authors+Show Affiliations

Urban Institute, Washington, D.C., USA. bspillma@ui.urban.orgNo affiliation info availableNo affiliation info available

Pub Type(s)

Journal Article
Research Support, Non-U.S. Gov't

Language

eng

PubMed ID

12611402

Citation

Spillman, Brenda C., et al. "Policy Implications of an Annuity Approach to Integrating Long-term Care Financing and Retirement Income." Journal of Aging and Health, vol. 15, no. 1, 2003, pp. 45-73.
Spillman BC, Murtaugh CM, Warshawsky MJ. Policy implications of an annuity approach to integrating long-term care financing and retirement income. J Aging Health. 2003;15(1):45-73.
Spillman, B. C., Murtaugh, C. M., & Warshawsky, M. J. (2003). Policy implications of an annuity approach to integrating long-term care financing and retirement income. Journal of Aging and Health, 15(1), pp. 45-73.
Spillman BC, Murtaugh CM, Warshawsky MJ. Policy Implications of an Annuity Approach to Integrating Long-term Care Financing and Retirement Income. J Aging Health. 2003;15(1):45-73. PubMed PMID: 12611402.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - Policy implications of an annuity approach to integrating long-term care financing and retirement income. AU - Spillman,Brenda C, AU - Murtaugh,Christopher M, AU - Warshawsky,Mark J, PY - 2003/3/4/pubmed PY - 2003/3/22/medline PY - 2003/3/4/entrez SP - 45 EP - 73 JF - Journal of aging and health JO - J Aging Health VL - 15 IS - 1 N2 - The authors consider an integrated income and disability annuity as an alternative framework for long-term care financing, show that pooling disability and mortality risks can reduce the need for medical underwriting, and discuss private and public implications. Data from the National Mortality Followback Survey of 1986 were used to simulate current underwriting and minimal underwriting, excluding only those already eligible for benefits. Remaining disability, life expectancy, and premiums are compared under both underwriting assumptions. Under minimal underwriting, 98% of persons age 65 would be eligible to purchase disability protection through an integrated annuity, versus 77% under current underwriting. Premiums for both the income and disability components were lower with minimal underwriting. Combining income and disability protection may be able to expand private markets for long-term care financing beyond what appears possible in the long-term care insurance market. Public policy should avoid the distortion of choices created by focusing exclusively on an insurance model. SN - 0898-2643 UR - https://www.unboundmedicine.com/medline/citation/12611402/Policy_implications_of_an_annuity_approach_to_integrating_long_term_care_financing_and_retirement_income_ L2 - http://journals.sagepub.com/doi/full/10.1177/0898264302239014?url_ver=Z39.88-2003&rfr_id=ori:rid:crossref.org&rfr_dat=cr_pub=pubmed DB - PRIME DP - Unbound Medicine ER -