The introduction of ex-ante risk equalisation in the Australian private health insurance market: a first step

Paolucci, Francesco and Shmueli, Amir (2011) The introduction of ex-ante risk equalisation in the Australian private health insurance market: a first step. Agenda, 18 (2). ISSN 1322-1833

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Abstract

In April 2007, the ‘Reinsurance’ arrangements in place since 1956 were replaced by a ‘Risk Equalisation’ scheme in the Australian private health insurance market. However, the new arrangements maintained a de facto ex-post (retrospective) claims-equalisation scheme. Equalisation transfers across competing health insurers could instead be achieved by means of a system of ex-ante prospective risk-adjusted subsidies with higher incentives for efficiency and lower incentives for selection compared to ex-post claims equalisation. This paper examines the option of introducing demographic scales for ex-ante (prospective) risk equalisation and its implications on the actual financial transfers (that is, risk-adjusted subsidies flows) across funds. The findings of this paper serve as an information basis for future policies aiming at improving efficiency and preventing selection in the Australian private health insurance market.

Item Type: Article
Subjects: B900 Others in Subjects allied to Medicine
L100 Economics
T800 Australasian studies
Department: Faculties > Health and Life Sciences > School of Health, Community and Education Studies > Nursing, Midwifery and Health
Faculties > Health and Life Sciences > School of Health, Community and Education Studies > Public Health and Wellbeing
Depositing User: Ay Okpokam
Date Deposited: 19 Apr 2012 11:40
Last Modified: 10 Aug 2015 11:38
URI: http://nrl.northumbria.ac.uk/id/eprint/6311

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