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Effects of Recent Carrot‐and‐Stick Policy Initiatives on Private Health Insurance Coverage in Australia

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  • ALFONS PALANGKARAYA
  • JONGSAY YONG

Abstract

The Australian government implemented a sequence of new policies during 1997–2000 and raised the take‐up rate of private health insurance (PHI) by 35 per cent. Because they were implemented sequentially, their individual effectiveness is not quite clear. We isolate the effects of Lifetime Health Cover (LHC) introduced at the last stage of the sequence using a counterfactual analysis of PHI demand with and without the new policies. Unlike earlier studies which attributed the bulk of the increase in PHI coverage to LHC, we find LHC may only account for as low as 42 per cent and no more than 75 per cent of the increase.

Suggested Citation

  • Alfons Palangkaraya & Jongsay Yong, 2005. "Effects of Recent Carrot‐and‐Stick Policy Initiatives on Private Health Insurance Coverage in Australia," The Economic Record, The Economic Society of Australia, vol. 81(254), pages 262-272, September.
    • Handle: RePEc:bla:ecorec:v:81:y:2005:i:254:p:262-272
    DOI: 10.1111/j.1475-4932.2005.00260.x
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