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Run for Cover Now or Later? The impact of premiums, threats and deadlines on supplementary private health insurance in Australia

Randall Ellis and Elizabeth Savage ()

No wp2008-013, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: Between 1997 and 2000 the Australian government introduced three policy reforms that aimed to increase private health insurance coverage and reduce public hospital demand. The first provided income-based tax incentives; the second gave an across-the-board 30% premium subsidy; and the third introduced selective age-based premium increases for those enrolling after a deadline. Together the reforms increased enrolment by 50% and reduced the average age of enrollees. The deadline appeared to induce consumers to enroll now rather than delay. We estimate a model of individual insurance decisions and examine the effects of the reforms on the age and income distribution of those with private cover. We interpret the major driver of the increased enrollment as a response to a deadline and an advertising blitz, rather than a pure price response.

Keywords: private health insurance; financial incentives; behavioural decisionmaking (search for similar items in EconPapers)
JEL-codes: D12 I11 I18 (search for similar items in EconPapers)
Pages: 27
Date: 2008-09
New Economics Papers: this item is included in nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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