Distributional Effects of Alternative Strategies for Financing Long-Term Services and Supports and Assisting Family Caregivers

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We use two historical data sources – the Health and Retirement Study and the Medicare Current Beneficiary Study – to consider patterns in older Americans’ severe disability and use of long-term services and supports (LTSS) by age and socioeconomic status. We then use a dynamic microsimulation model to project how the effects of various interventions to support those with severe disabilities and their caregivers would be distributed across the income distribution. The policy interventions that we examine fall into three broad categories: tax credits for caregiving expenses, respite care for people who have family caregivers, and new social insurance programs. Within each broad class of policies, we examine how sensitive outcomes are to changes in policy details (such as, in the case of tax credits, deductible levels, refundability, and income phase-outs).