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The Economics of a Two Tier Health System: A Fairer Medicare?

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  • Patricia Apps
  • Ray Rees
  • Elizabeth Savage

Abstract

This paper analyses a recent proposal of the Australian Government to reform the existing Medicare system. It develops models of the physician’s behaviour and of a household’s demand for medical insurance under the proposed system, and then proceeds to characterise the equilibrium under the new proposals. It argues that those most likely to be made worse off are low income households with children, though a full evaluation of the effects of the proposal requires it to be analysed in a public finance framework.

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Bibliographic Info

Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 478.

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Length: 24 pages
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:auu:dpaper:478

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Keywords: health care; government policy; medical insurance;

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  1. Strohmenger, R. & Wambach, A., 2000. "Adverse selection and categorical discrimination in the health insurance markets: the effects of genetic tests," Journal of Health Economics, Elsevier, vol. 19(2), pages 197-218, March.
  2. Michael Hoy, 1984. "The Impact of Imperfectly Categorizing Risks on Income Inequality and Social Welfare," Canadian Journal of Economics, Canadian Economics Association, vol. 17(3), pages 557-68, August.
  3. Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
  4. Hoy, Michael, 1982. "Categorizing Risks in the Insurance Industry," The Quarterly Journal of Economics, MIT Press, vol. 97(2), pages 321-36, May.
  5. Elizabeth Savage & Glenn Jones, 2004. "An Analysis of the General Practice Access Scheme on GP Incomes, Bulk Billing and Consumer Copayments," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(1), pages 31-40, 03.
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