The Income Distributive Implications of Recent Private Health Insurance Policies in Australia

Jongsay Yong, Alfons Palangkaraya, Elizabeth Webster (e.webster@unimelb.edu.au) and Peter Dawkins
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Peter Dawkins: Victorian Department of Treasury and Finance

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: The Australian government implemented a series of new private health insurance policies between 1997 and 2000. As a result, the proportion of the population with private health insurance coverage increased by more than 35%. However, this paper finds significant evidence that the policy reform disproportionately favours high income earners. In particular, the 30 per cent premium subsidy represents a windfall gain for households which would have purchased private health insurance even without the rebate. The amount of the gain is approximately $900 million per year, a large proportion of which would go to higher income households.

Pages: 25 pages
Date: 2006-02
New Economics Papers: this item is included in nep-hea and nep-ias
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