Old age or dependence: Which social insurance?

In recent decades, there has been an increase in life expectancy and a rapid of the very senior dependency ratio developed countries. this context, we examine optimal levels public pensions long-term care (LTC) insurance. According to most reasonable estimates correlations among individual incomes, risks mortality dependency, show that it is always desirable for utilitarian social planner have balanced budget LTC benefits at expense pension benefits, until cost fully covered. This true with or without liquidity constraints. For Rawlsian planner, balance between two schemes depends on comparison survival probability dependence risk poor its population average.