EconPapers    
Economics at your fingertips  
 

Risk Equalisation in Ireland and Australia: A Simulation Analysis to Compare Outcomes

John Armstrong () and Francesco Paolucci ()
Additional contact information
John Armstrong: Institute of Public Administration, Lansdowne Road, Dublin 4, Ireland.

The Geneva Papers on Risk and Insurance - Issues and Practice, 2010, vol. 35, issue 4, 521-538

Abstract: Risk equalisation has been implemented in a number of countries as a means of providing explicit risk-adjusted transfers between health insurance undertakings to improve efficiency within the health insurance market, and make health insurance affordable. Two such countries are Australia and Ireland. In this article, a simulation exercise is carried out to compare the effectiveness of the two countries’ risk equalisation schemes in meeting the policy objectives of encouraging insurers to be efficient and discouraging them from engaging in risk selection. The results of the analysis show that the Australian scheme is less effective than the Irish scheme in reducing the incentive for risk selection and in encouraging insurers to be efficient. The results provide evidence that direct standardisation mechanisms (as used in Ireland) can lead to superior outcomes as compared to indirect standardisation mechanisms (as used in Australia) in terms of promoting efficiency and deterring risk selection.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.palgrave-journals.com/gpp/journal/v35/n4/pdf/gpp201023a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/gpp/journal/v35/n4/full/gpp201023a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:35:y:2010:i:4:p:521-538

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41288/PS2

Access Statistics for this article

The Geneva Papers on Risk and Insurance - Issues and Practice is currently edited by Christophe Courbage

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan, The Geneva Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-03-29
Handle: RePEc:pal:gpprii:v:35:y:2010:i:4:p:521-538