Estimating Disability Incidence Rates for Long Term Care Insurance

This paper uses data from the 1999 NLTCS and NHIS surveys to compute Long Term Care (LTC) prevalence rates. We develop several triggers, evaluate a test of cognitive ability, and compute prevalence rates for each trigger. We develop a model to compute LTC incidence rates based on the prevalence data. We find that incidence is a strictly increasing function of age and that there is a sharp increase in incidence rates starting at age ninety.