The Australian government in contrast to the New Zealand government, has intervened in the Australian private health insurance industry, both in regulating its processes and in incentivising greater uptake of insurance (Colombo & Tapay, 2003). The regulations imposed on the industry have largely been in place since 1953 and are beyond the scope of this project (Colombo & Tapay, 2003).
The institutional arrangement of interest is the Private Health Insurance Incentives Scheme, which involved three stages over the period of 1997 – 2000, over which time private health insurance coverage jumped from 30.1% to 46% of the population (Harley et al., 2002). Three stages to the scheme:
- 1997: Tax penalty on high earners who did not have private health insurance, in addition to a 30% subsidy on premiums for people on low incomes
- 1998: 30% subsidy was made universal (no longer means-tested)
- 2000: This change related to a pre-existing regulation, and was beyond the scope of this project.
The results of in-depth case study on the first two measures are presented in the below table:
|Tax penalty for high earners without insurance||
|Universal 30% rebate on premiums||
Colombo, F. & Tapay, N. (2003). Private health insurance in Australia: A case study. OECD health working papers no. 8. Retrieved from http://www.oecd.org/dataoecd/5/54/22364106.pdf
Harley, J., Vaithianathan, R., Crossley, T. F., Cobb-Clark, D. (2002). Parallel Private Health Insurance in Australia: A Cautionary Tale and Lessons for Canada. Retrieved from ftp://repec.iza.org/RePEc/Discussionpaper/dp515.pdf