Catalog Home Page

The Introduction of Ex-ante Risk Equalisation in the Australian Private Health Insurance Market: A First Step

Paolucci, F. and Shmueli, A. (2011) The Introduction of Ex-ante Risk Equalisation in the Australian Private Health Insurance Market: A First Step. Agenda - A Journal of Policy Analysis and Reform, 18 (2). pp. 71-92.

[img]
Preview
PDF - Published Version
Available under License Creative Commons Attribution Non-commercial.

Download (1MB) | Preview
Free to read: http://press.anu.edu.au/publications/agenda-journa...
*No subscription required

Abstract

In April 2007, the ‘Reinsurance’ arrangements in place since 1956 were replaced by a ‘Risk Equalisation’ scheme in the Australian private health insurance market. However, the new arrangements maintained a de facto ex-post (retrospective) claims-equalisation scheme. Equalisation transfers across competing health insurers could instead be achieved by means of a system of ex-ante prospective risk-adjusted subsidies with higher incentives for efficiency and lower incentives for selection compared to ex-post claims equalisation. This paper examines the option of introducing demographic scales for ex-ante (prospective) risk equalisation and its implications on the actual financial transfers (that is, risk-adjusted subsidies flows) across funds. The findings of this paper serve as an information basis for future policies aiming at improving efficiency and preventing selection in the Australian private health insurance market.

Publication Type: Journal Article
Publisher: College of Business and Economics, Australian National University
URI: http://researchrepository.murdoch.edu.au/id/eprint/37327
Item Control Page Item Control Page

Downloads

Downloads per month over past year