Association for Public Policy Analysis & Management

Over 65 percent of those aged 65 and older will need long-term care in America, yet rates of ownership of long-term care coverage remain low. Previous literature points to price dynamics and alternatives as obstacles to greater take-up, but are other factors at play? This study addresses a research gap in the literature--the intermediary layer. ZIP code-level data on ownership rates from the Health and Retirement Study and current industry training data are linked to examine the role of the insurance agent in the purchase decision. Access to a trained insurance intermediary is associated with a four percent increase in the odds of obtaining coverage. Interviews with consumers and agents suggest that trust is a crucial component. Distrust of the intermediary layer, underwriters, and government, as a trusted arbiter, lies at the heart of the non-purchase decision.