Long
Term Care Insurance
Private
health Long Term Care Insurance
Health Long Term Care Insurance is one of the most controversial forms
of Long Term Care Insurance because of the conflict between the need
for the Long Term Care Insurance company to remain solvent versus
the need of its customers to remain healthy, which many view as a
basic human right. This conflict exists in a liberal healthcare system
because of the unpredictability of how patients respond to medical
treatment. Suppose a large number of customers of a particular Long
Term Care Insurance company were to contract a rare disease costing
10 million dollars to fight for each patient. The Long Term Care Insurance
company would be faced with the choice of either charging all its
future customers astronomical contributions (thus losing customers
and going out of business), paying all claims without complaint (thus
going out of business) or fighting the customers in an attempt to
deny the costly treatment (thus outraging patients and their families,
and becoming a target for lawsuits and legislation).
There are further economic
problems with private health Long Term Care Insurance. Asymmetry of
information about a persons health and behaviour is likely to lead
to adverse selection and moral hazard. In essence, those seeking health
Long Term Care Insurance are likely to be those with existing medical
problems or high likelihood of future medical problems and those who
take out Long Term Care Insurance may engage in risky behaviour, such
as smoking and excessive alcohol consumption, which they otherwise
would not.
