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

Author

Listed:
  • Randall P. Ellis

    (Department of Economics, Boston University)

  • Elizabeth Savageb

    (University of Technology Sydney, Centre for Health Economics Research and Evaluation, Sydney, Australia)

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.

Suggested Citation

  • Randall P. Ellis & Elizabeth Savageb, 2007. "Response: Run for Cover Now or Later?The impact of premiums, threats and deadlines on supplementary private health insurance in Australia," Boston University - Department of Economics - Working Papers Series WP2007-036, Boston University - Department of Economics.
    • Handle: RePEc:bos:wpaper:wp2007-036
    as

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    References listed on IDEAS

    as
    1. O'Donoghue, Ted & Rabin, Matthew, 1997. "Doing It Now or Later," Department of Economics, Working Paper Series qt7t44m5b0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    2. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
    3. Colm Harmon & Brian Nolan, 2001. "Health insurance and health services utilization in Ireland," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 135-145, March.
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