The Role of Alzheimer’s Disease Polygenic Risk, Informal Care, and Information in the Demand for Long-term Care Insurance

This study aims to explore and test factors that explain why people buy less insurance to cover long-term later-life care than economic theory predicts. This topic occupies a central place in ongoing and increasingly important policy and scientific debates as the so-called Baby Boomers advance into older ages. Theoretically, the demand for long-term care insurance (LTCI) varies greatly across people but demand is sharply higher among individuals whose physical and cognitive functioning declines rapidly. To explore demand determinants, we focus on Alzheimer’s disease and related diseases (ADRD).

Our primary aim is to investigate whether individual demand for LTCI varies systematically with ADRD information individuals hold and get. We focus on information about the risk of getting and (shadow) cost of living with ADRD and about the availability and cost of LTCI. A secondary aim is to explore the extent to which individuals demand less LTCI because they expect children to provide informal care. In pursuit of both aims, we will explore heterogeneity across individuals with more and fewer social and economic resources. We will pursue four specific aims:

Aim 1: Develop and describe a measure of exposure to ADRD information that varies across individuals, over time and geography;

Aim 2: Use the method of instrumental variables to account for the endogeneity in the amount and flow of information;

Use nationally-representative and longitudinal Health and Retirement Study (HRS) data to:

Aim 3: Measure each respondent’s family history of ADRD and construct polygenic risk scores (PGRSs) for developing ADRD. In the latter effort, we will exploit new discoveries of genetic variants that exhibit credible and robust associations with ADRD.

Aim 4: Model the demand for LTCI as a function of (exogenous) information and factors plausibly related to the demand for and supply of long-term care (LTC) from “informal” sources. We will control not only for demographic factors but also for family history of ADRD and each individual’s polygenic risk for ADRD.

To the best of our knowledge, this Study is the first to generate exogenous measures of information from popular media sources for a nationally representative sample. This study will advance our general understanding of the role information plays in economic decisions and we expect to produce credible estimates of whether new information in popular media causes people to demand LTCI in particular. More generally, our results will inform policy that sits at the interface between general information and information specific to individuals (family history of ADRD and genetic predisposition). Since there is no effective treatment for ADRD, improved detection of ADRD risk provides no clinically actionable information. On the other hand, a positive ADRD screen might induce patients to make healthy decisions that are helpful. Our study will yield evidence about the marginal effect of information from popular consumer media among people with and without individual specific information about their risk of developing ADRD and while controlling for differences in LTCI demand that one observes among people with more and less expected supply of informal care.