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  • The Analytics of the Private Health Insurance Rebate and the Medicare Levy Surcharge

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    Author(s)
    Robson, Alex
    Ergas, Henry
    Paolucci, Francesco
    Griffith University Author(s)
    Robson, Alex
    Year published
    2011
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    Abstract
    This paper presents an analytical framework for examining changes in the Private Health Insurance rebate (PHIR) and the Medicare Levy Surcharge (MLS), and uses it to establish three key propositions. First, increases in the MLS rate tend to reduce the elasticity of demand for private health insurance. Second, simultaneously increasing MLS rates and thresholds has a theoretically ambiguous effect on PHI take-up rates. Third, means testing the PHIR can never increase PHI take-up, and will reduce it in some circumstances. The paper concludes with a discussion of the possible consequences of recently proposed policy changes to ...
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    This paper presents an analytical framework for examining changes in the Private Health Insurance rebate (PHIR) and the Medicare Levy Surcharge (MLS), and uses it to establish three key propositions. First, increases in the MLS rate tend to reduce the elasticity of demand for private health insurance. Second, simultaneously increasing MLS rates and thresholds has a theoretically ambiguous effect on PHI take-up rates. Third, means testing the PHIR can never increase PHI take-up, and will reduce it in some circumstances. The paper concludes with a discussion of the possible consequences of recently proposed policy changes to private health insurance in Australia.
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    Journal Title
    Agenda
    Volume
    18
    Issue
    2
    Publisher URI
    http://epress.anu.edu.au?p=151621
    Copyright Statement
    © The Author(s) 2011. The attached file is reproduced here in accordance with the copyright policy of the publisher. For information about this journal please refer to the journal’s website or contact the authors.
    Subject
    Health Economics
    Applied Economics
    Banking, Finance and Investment
    Policy and Administration
    Publication URI
    http://hdl.handle.net/10072/44009
    Collection
    • Journal articles

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