Will subsidising private health insurance help the public system?
Date
2002
Authors
Vaithianathan, R.
Journal Title
Journal ISSN
Volume Title
Publisher
Blackwell Publishing Ltd
Abstract
This paper challenges the argument that expanding private health insurance coverage in Australia will reduce the demand for public hospitals. We construct a simple model to illustrate that although a premium subsidy might expand insurance coverage, it may not reduce the demand for public health services. The reason is that, under certain conditions, government subsidies only increase insurance coverage among self-insured consumers; that is, consumers who are uninsured but purchase private health care if they fall ill. We argue that subsidising private health care rather than insurance is a more effective way of reducing the demand for public health services.
Description
Keywords
Keywords: privatization; public health; social policy; subsidy system; Australia
Citation
Collections
Source
The Economic Record
Type
Journal article