The Rise of Private Health Insurance in Australia: Early Effects on Insurance and Hospital Markets

Abstract

Over a three year period from July 1997 to July 2000, the Australian government introduced a series of policies designed to increase the proportion of the population with private health insurance. The combined effect of the policies was an increase in the population coverage from a low point of 30.1 percent to 45.7 percent. The motivation for these policies was to force more Australians to use the private sector for their hospital care and in so doing reduce the pressure on the public sector. We piece together fragmentary early data from various sources and various time periods. We find that the increase in activity in the private hospital sector and the reduction in public hospital waiting times has indeed occurred.