Removing duplication in public/private health insurance in Australia: opting out with risk-adjusted subsidies?

Paolucci, Francesco, Butler, James and van de Ven, Wynand (2011) Removing duplication in public/private health insurance in Australia: opting out with risk-adjusted subsidies? Agenda, 18 (2). ISSN 1322-1833

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Abstract

Australia’s existing health-financing arrangements lead to partial duplication in coverage for private health insurance (PHI) holders. The two options to remove duplication are: 1) allowing individuals to ‘opt out’ from Medicare either (a) by purchasing PHI or (b) by self-insuring via medical savings accounts or other pre-payment arrangements; 2) confining PHI to the coverage of supplementary services. This paper argues in favour of Option 1(a), and argues that from an efficiency perspective PHI should be fully substitutive of Medicare coverage (that is, ‘opting out’ should be allowed); community rating should be replaced by premium bands; and the 30–40 per cent ad valorem subsidy for PHI should be replaced by ex-ante risk-adjusted subsidies.

Item Type:	Article
Subjects:	B900 Others in Subjects allied to Medicine L100 Economics T800 Australasian studies
Department:	Faculties > Health and Life Sciences > Nursing, Midwifery and Health Faculties > Health and Life Sciences > Social Work, Education and Community Wellbeing
Depositing User:	Ay Okpokam
Date Deposited:	19 Apr 2012 11:27
Last Modified:	12 Oct 2019 14:38
URI:	http://nrl.northumbria.ac.uk/id/eprint/6310

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