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Docta Complutense author Paolucci, Francesco author Przemyslaw, M. Sowa, author García Goñi, Manuel author Erga, Henry 2023-06-18T06:02:55Z 2023-06-18T06:02:55Z 2015-02 0144686X 10.1017/S0144686X13000767 https://hdl.handle.net/20.500.14352/23807 http://dx.doi.org.bucm.idm.oclc.org/10.1017/S0144686X13000767 This paper assesses the feasibility and welfare-improving potential of an insurance market for aged care expenses in Australia. As in many other countries, demographic dynamics coupled with an upward trend in costs of personal care result in consumer co-contributions imposing a risk of expenses that could constitute a significant proportion of lifetime savings, in spite of the presence of a government-run aged care scheme. We explore issues around the development of an insurance market in this particular setting, considering adverse selection, moral hazard, timing of purchase, transaction costs and correlation of risks, as well as such contextual factors as longevity and aged care cost determinants. The analysis indicates aged care insurance is both feasible and welfare-enhancing, thus providing a gainful alternative to the aged care reform proposed by the Productivity Commission in 2011. However, while the insurance market would benefit the ageing Australian population, it is unlikely to emerge spontaneously because of the problem of myopic individual perceptions of long-term goals. Consequently, we recommend regulatory action to trigger the market development. eng Mandatory aged care insurance: a case for Australia journal article URL https://docta.ucm.es/bitstreams/b17c3fbe-fb4e-405e-9a23-314cb8686ed0/download File MD5 b0d396d8fe4ecc96b49301dacc8ef9ef 115962 application/pdf Paolucci; F.; Przemyslaw, M.; García Goñi, M.-Mandatory age care insurance; a case for Australia.pdf URL https://docta.ucm.es/bitstreams/dc6866bf-df65-4ea6-978a-b22514e058ab/download File MD5 cc092c0584ae2919bca02547da5e876f 40920 text/plain Paolucci; F.; Przemyslaw, M.; García Goñi, M.-Mandatory age care insurance; a case for Australia.pdf.txt