Moral hazard in Australian private health insurance: the case of dental care services and extras cover
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Embargoed until: 2022-09-15
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Author(s)
Nguyen, Lan
Worthington, Andrew C
Year published
2021
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Show full item recordAbstract
We assess ex post moral hazard in Australian private health insurance (PHI) relating to dental care services (so-called extras cover) using the longitudinal Household, Income and Labour Dynamics in Australia (HILDA) Survey. Cross-sectional probit regressions specify dental care use as a function of dental care demand and endogenous PHI policy holding, including self-assessed health condition, health risk factors and socio-economic controls including age, income, education, family structure and welfare status. We find that ex post moral hazard results in the additional use of dental care services by PHI holders. Further, ...
View more >We assess ex post moral hazard in Australian private health insurance (PHI) relating to dental care services (so-called extras cover) using the longitudinal Household, Income and Labour Dynamics in Australia (HILDA) Survey. Cross-sectional probit regressions specify dental care use as a function of dental care demand and endogenous PHI policy holding, including self-assessed health condition, health risk factors and socio-economic controls including age, income, education, family structure and welfare status. We find that ex post moral hazard results in the additional use of dental care services by PHI holders. Further, dynamic analysis indicates that PHI, no matter how sporadic, is always associated with significantly more likely use of dental care services, increasing when continuously held, suggesting strong persistence in moral hazard.
View less >
View more >We assess ex post moral hazard in Australian private health insurance (PHI) relating to dental care services (so-called extras cover) using the longitudinal Household, Income and Labour Dynamics in Australia (HILDA) Survey. Cross-sectional probit regressions specify dental care use as a function of dental care demand and endogenous PHI policy holding, including self-assessed health condition, health risk factors and socio-economic controls including age, income, education, family structure and welfare status. We find that ex post moral hazard results in the additional use of dental care services by PHI holders. Further, dynamic analysis indicates that PHI, no matter how sporadic, is always associated with significantly more likely use of dental care services, increasing when continuously held, suggesting strong persistence in moral hazard.
View less >
Journal Title
The Geneva Papers on Risk and Insurance - Issues and Practice
Copyright Statement
© 2021 Palgrave Macmillan. This is a post-peer-review, pre-copyedit version of an article published in The Geneva Papers on Risk and Insurance - Issues and Practice. The definitive publisher-authenticated version The Geneva Papers on Risk and Insurance - Issues and Practice 2021 is available online at: https://doi.org/10.1057/s41288-021-00245-3
Note
This publication has been entered as an advanced online version in Griffith Research Online.
Subject
Health economics
Applied economics
Public health
Social Sciences
Business, Finance
Business & Economics
Private health insurance
Moral hazard