Caring for the Disabled Elderly: Who Will Pay?

By Alice M. Rivlin; Joshua M. Wiener et al. | Go to book overview

Chapter Two
The Model and the Base Case

The first task in evaluating alternative policies for financing long-term care was to construct a model that could be used to project the size and status of the elderly population, showing their likely numbers, by age, sex, and other characteristics" their expected use of long-term care of various sorts" and their financial resources to pay for it. With that information in hand, the cost of financing long-term care both under current policy and under new public and private financing mechanisms can be projected. The model can also estimate how new mechanisms would affect different groups in the elderly population and spending from existing private sources and public programs, such as medicaid.

This chapter first describes the Brookings-ICF Long-Term Care Financing Model. We explain the methodology in general terms (more details can be found in the Technical Appendix), highlight key assumptions, and point out some of the limitations of the model. In the second part of the chapter, we discuss the "base case," or what is likely to happen if current policies are continued. Finally, we show how the findings of the model are sensitive to different economic and demographic assumptions.


The Model

Our first objective was to construct a model of the elderly population that would project likely changes in their numbers, ages, income and assets, prevalence of disability, and so forth. To that end, we worked with ICF Incorporated to develop a computer simulation model of the older population known as the Brookings-ICF Long-Term Care Financing Model.

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