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This research article, published by VoxEU, discusses the importance of designing out-of-pocket payments for nursing home care to balance the goals of protecting older individuals against excessive costs and limiting public spending on care, drawing on a study of a Dutch reform. It explores how co-payments influence nursing home admissions and financial risk, finding evidence of moral hazard and suggesting potential improvements such as capping lifetime out-of-pocket payments to enhance financial protection while maintaining efficiency in the long-term care system.