in the United States is very costly. Similarly, long-term care insurance in the United States is very costly in comparison with other forms of health insurance (Gleckman, 2004).
The utility of long-term care insurance is similar in character to that of major medical insurance, in that it protects a person's financial assets when a medical need arises, the cost of which will consume most or all of the person's financial assets (Hilbert, 2004). Major medical policies, however, typically do not cover long-term care that does not stem from some condition requiring hospitalization. Long-term care insurance policies provide necessary care for all types of care needs, including the inability to care for oneself as one grows older (Peck, 2004).
The Medicare and Medicaid publicly-supported insurance programs either provide only limited long-term care (Medicare) or require a person to exhaust all or nearly all of their financial assets before they qualify for the coverage (Medicaid). Medicare supplementary policies offered by private insurance providers typically include relatively low limits on total benefits, as well as limitations on the type and location of long-term care provided. Personal savings can provide a substitute for long-term care insurance. For the great majority of the people residing in the United States, however, a need for long-term care would quickly exhaust one's personal savings. Were the person to recover to the extent that long-term care was no longer necessary, the likelihood is that the person (a) would have no personal savings remaining and (b) would be too old or to frail to earn a living (Shreve & Van Den Bos, 2004).
Changes in product demand in relation to product price reflect the price elasticity of demand of the product. Price inelasticity of demand means that demand does not change in relation to changes in price. A low price elasticity of demand means that the proportionate change in demand ...