Medicaid and long-term care : the effects of penalizing strategic asset transfers

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Título: Medicaid and long-term care : the effects of penalizing strategic asset transfers / Junhao Liu, Anita Mukherjee

Notas: Sumario: Medicaid provides a critical source of insurance for long term care, and individuals may strategically offload assets (typically to children) to meet the means-tested eligibility requirement. In this article, we quantify the extent of such behavior using variation in the penalty for improper parent-to-child transfers induced by the Deficit Reduction Act of 2005. We estimate difference-indifferences models based on the hypothesis that only individuals with high levels of nursing home risk (high risk) will alter transfers because of the Act. We find that a 2-year horizon, high-risk individuals reduced transfers to children on the extensive margin by 11 percent and that the average total amount of transfers decreased by $4,860. The results hold only for coupled respondents. We also conduct a tripledifferences analysis to examine heterogeneity with financial literacy and find that even those with a low level of financial literacy responded to the penalty.

Autores secundários: Mukherjee, A.

Outras classificações: 34

Direitos: In Copyright (InC): http://rightsstatements.org/vocab/InC/1.0/