Centro de Documentacion de Fundación MAPFRE - Medicaid and long-term care : the effects of penalizing strategic asset transfers

MAP20210005626

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

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

En: The Journal of risk and insurance. - Nueva York : The American Risk and Insurance Association, 1964- = ISSN 0022-4367. - 01/03/2021 Volumen 88 Número 1 - marzo 2021 , p. 53-77

1. Seguro de dependencia . 2. Seguro de personas . 3. Niños . 4. Medicaid . 5. Estados Unidos . I. Mukherjee, A. . II. Título.