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Explaining the Contraction in the Market for Private Health Insurance in Australia, 1989–1995

Published online by Cambridge University Press:  01 January 2023

Garry F. Barrett  and
Robert Conlon
Garry F. Barrett
Affiliation:
School of Economics, University of New South Wales
Robert Conlon
Affiliation:
School of Economics, University of New South Wales
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Abstract

We use data from the ABS National Health Surveys for 1989 and 1995 to assess if adverse selection is present as an influence on the proportions the ‘insurable population’ with health insurance (the ‘incidence of coverage’); and of those covered, the ‘risk composition’ of health fund membership. Further, we assess if any changes in these characteristics between the two surveys are consistent with a continuing process of adverse selection. The characteristics of the respective sample populations used in our evaluation include age and income distributions, health characteristics of various types, and behaviour that is known to incur health risks. Our findings suggest the presence of adverse selection in both 1989 and 1995, and in terms of the age distribution of membership and especially the number of health conditions suffered, changes composition of the health fund membership between the two surveys indicate the process of adverse selection accelerated over the period.

Type
Research Article
Information
The Economic and Labour Relations Review , Volume 12 , Issue 2 , December 2001 , pp. 210 - 224
Copyright
Copyright © The Author(s) 2001

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