Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates

Fatih Cemil Özbuğday

doi:10.51819/jaltc.2025.1664327

Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates

Abstract

This study develops and analyzes an agent-based model (ABM) of long-term care insurance (LTCI) demand, focusing on whether “healthy aging” (prolonged well-being and slower functional decline) diminishes overall LTCI coverage and delays insurance purchases. Compared to standard econometric methods, our ABM framework captures heterogeneous agent attributes and boundedly rational behaviors, which includes a calibrated myopia parameter that discounts future care risks. In simulated baseline and healthy-aging scenarios, we find that extended health spans do not significantly reduce final LTCI uptake rates; by the end of a 30-year horizon, coverage converges to roughly 25–26% in both models. Although healthier agents may defer purchasing slightly, this effect is marginal, which indicates that late-life risk perceptions ultimately override earlier confidence in health. Sensitivity analyses substantiate these core findings: premium adjustments induce substantial shifts in LTCI coverage, while variations in public and informal care substitution or myopia exert lesser impacts on final outcomes. Hence, premium affordability emerges as the principal lever for increasing LTCI adoption, whereas moderate modifications to healthy aging or behavioral assumptions do not substantially alter late-life coverage levels. Despite simplifying assumptions—such as exogenous informal care and a single LTCI product—the study underscores the power of ABMs to explore complex “what-if” scenarios and emergent market behaviors. Future extensions might incorporate dynamic insurer policies, more nuanced family interactions, and heterogeneous risk aversion to further enrich the understanding of LTCI uptake in aging societies.

Keywords

References

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Details

Primary Language

English

Subjects

Microeconomics (Other)

Journal Section

Research Article

Authors

Fatih Cemil Özbuğday ^*
0000-0001-5841-4343
Türkiye

Publication Date

December 29, 2025

Submission Date

March 24, 2025

Acceptance Date

August 8, 2025

Published in Issue

Year 2025 Volume: 8 Number: 1

DOI

https://doi.org/10.51819/jaltc.2025.1664327

IZ

https://izlik.org/JA42FA37HJ

Cite

RIS / Bibtex

APA

Özbuğday, F. C. (2025). Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates. Journal of Aging and Long-Term Care, 8(1), 37-60. https://doi.org/10.51819/jaltc.2025.1664327

AMA

1.Özbuğday FC. Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates. J Aging Long Term Care. 2025;8(1):37-60. doi:10.51819/jaltc.2025.1664327

Chicago

Özbuğday, Fatih Cemil. 2025. “Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates”. Journal of Aging and Long-Term Care 8 (1): 37-60. https://doi.org/10.51819/jaltc.2025.1664327.

EndNote

Özbuğday FC (December 1, 2025) Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates. Journal of Aging and Long-Term Care 8 1 37–60.

IEEE

[1]F. C. Özbuğday, “Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates”, J Aging Long Term Care, vol. 8, no. 1, pp. 37–60, Dec. 2025, doi: 10.51819/jaltc.2025.1664327.

ISNAD

Özbuğday, Fatih Cemil. “Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates”. Journal of Aging and Long-Term Care 8/1 (December 1, 2025): 37-60. https://doi.org/10.51819/jaltc.2025.1664327.

JAMA

1.Özbuğday FC. Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates. J Aging Long Term Care. 2025;8:37–60.

MLA

Özbuğday, Fatih Cemil. “Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates”. Journal of Aging and Long-Term Care, vol. 8, no. 1, Dec. 2025, pp. 37-60, doi:10.51819/jaltc.2025.1664327.

Vancouver

1.Fatih Cemil Özbuğday. Does Healthier Aging Alter Long-Term Care Insurance Demand? An Agent-Based Model of Coverage Timing and Rates. J Aging Long Term Care. 2025 Dec. 1;8(1):37-60. doi:10.51819/jaltc.2025.1664327