Social Insurance for Long-Term Care with Deductible and Linear Contributions

With the rapid increase in long-term care (LTC) needs, the negligible role of the market, and the declining role of informal family care, one might expect that the government would take a more proactive role in the support of dependent elderly, particularly those who cannot, whatever the reason, count on assistance from their family. The purpose of this paper is to analyze the possibility of designing a sustainable public LTC scheme that would meet a widespread concern, that about going bankrupt and being unable to bequeath any saving to one's children.