Abstract
Australia’s existing health financing arrangements lead to partial duplication in coverage for private health insurance holders. The two options to remove duplication are: 1) allowing individuals to ‘opt-out’ from Medicare either (a) by purchasing private health insurance or (b) by self-insuring via medical savings accounts or other pre-payment arrangements; 2) confining private health insurance to the coverage of supplementary services. This paper argues in favour of option 1(a), and argues that from an efficiency perspective: private health insurance should be fully substitutive of Medicare coverage (i.e. ‘opting-out’ should be allowed); community-rating should be replaced by premium bands; and the 30-40% ad valorem subsidy for private health insurance should be replaced by ex-ante risk-adjusted subsidies.
Original language | English |
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Pages (from-to) | 147-159 |
Journal | Politiche Sanitarie |
Volume | 13 |
Issue number | 3 |
Publication status | Published - 2012 |
Keywords
- Health financing arrangements
- Medicare
- private health insurance