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Interactions between Private Health and Long‐term Care Insurance and the Effects of the Crisis: Evidence for Spain

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  • Sergi Jiménez‐Martín
  • José M. Labeaga‐Azcona
  • Cristina Vilaplana‐Prieto
Abstract
This paper analyzes the reasons for the scarce development of the private long‐term care insurance market in Spain, and its relationship with health insurance. We are also interested in the effects the crisis has had both on the evolution of the demand for long‐term care insurance and on the existence of regional disparities. We estimate bivariate probit models with endogenous variables using Spanish data from the Survey on Health and Retirement in Europe. Our results confirm that individuals wishing to purchase long‐term care insurance are, in a sense, forced to subscribe a health insurance policy. In spite of this restriction in the supply of long‐term care insurance contracts, we find its demand has grown in recent years, which we attribute to the budget cuts affecting the implementation of Spain's System of Autonomy and Attention to Dependent People. Regional differences in its implementation, as well as the varying effects the crisis has had across Spanish regions, lead to the existence of a crowding‐in effect in the demand for long‐term care insurance in those regions where co‐payment is based on income and wealth, those that have a lower percentage of public long‐term care beneficiaries, or those with a smaller share of cash benefits over total public benefits. Copyright © 2016 John Wiley & Sons, Ltd.

Suggested Citation

  • Sergi Jiménez‐Martín & José M. Labeaga‐Azcona & Cristina Vilaplana‐Prieto, 2016. "Interactions between Private Health and Long‐term Care Insurance and the Effects of the Crisis: Evidence for Spain," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 159-179, November.
    • Handle: RePEc:wly:hlthec:v:25:y:2016:i:s2:p:159-179
    DOI: 10.1002/hec.3440
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