Effects of Recent Carrot-and-Stick Policy Initiatives on Private Health Insurance Coverage in Australia

Palangkaraya, Alfons; Yong, Jongsay

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Effects of Recent Carrot-and-Stick Policy Initiatives on Private Health Insurance Coverage in Australia

Economic Record, Vol. 81, No. 254, pp. 262-272, September 2005

11 Pages Posted: 3 Sep 2005

See all articles by Alfons Palangkaraya

Alfons Palangkaraya

Centre for Transformative Innovation, Faculty of Business and Law, Swinburne University of Technology

Jongsay Yong

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Abstract

The Australian government implemented a sequence of new policies during 1997-2000 and raised the take-up rate of private health insurance (PHI) by 35 per cent. Because they were implemented sequentially, their individual effectiveness is not quite clear. We isolate the effects of Lifetime Health Cover (LHC) introduced at the last stage of the sequence using a counterfactual analysis of PHI demand with and without the new policies. Unlike earlier studies which attributed the bulk of the increase in PHI coverage to LHC, we find LHC may only account for as low as 42 per cent and no more than 75 per cent of the increase.

Suggested Citation: Suggested Citation

Palangkaraya, Alfons and Yong, Jongsay, Effects of Recent Carrot-and-Stick Policy Initiatives on Private Health Insurance Coverage in Australia. Economic Record, Vol. 81, No. 254, pp. 262-272, September 2005, Available at SSRN: https://ssrn.com/abstract=783242