The proportion
of elderly projected to buy long- term care insurance in 2016-20
ranges from a quarter of the elderly for BIGBEN to nearly two-thirds
of the elderly for MEDIGAP. Although the BIGBEN policy reaches
only 25 percent of the elderly aged 67 and over, the LOWBEN
alternative results in coverage of 45 percent of the elderly
aged 67 and over. Improved affordability is obtained by reducing
the indemnity level purchased. Thus BIGBEN and LOWBEN are affordable
by a substantial minority, but not a majority, of the elderly,
even with generous purchase assumptions. Under an assumption
of 4.4. percent rather than 5.8 percent annual nursing home
and home care inflation, 57 percent of the elderly aged 67 and
over could hold LOWBEN policies in 2016-20. A significantly
lower inflation rate increases but does not dramatically change
the proportion of elderly who might participate in insurance.