Risk equalisation and voluntary health insurance markets: The case of Australia

Connelly, Luke B.; Paolucci, Francesco; Butler, James R.G.; Collins, Paul

doi:10.1016/j.healthpol.2010.06.002

Cited by 32 publications

(13 citation statements)

References 4 publications

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“…Furthermore, the institution of reinsurance/risk equalization schemes for PHI in Australia (Connelly et al ., ), may also be viewed as attempts to arrest an adverse selection “death spiral” in Australian PHI markets (Butler, ), while preserving community‐rating and open enrolment. More recently, the Government's decision to extend the Medicare safety net to provide additional financial protection for those who would otherwise incur high out‐of‐pocket expenses can also be seen as policy that is motivated by considerations of equity.…”

Section: Introductionmentioning

confidence: 99%

Health Policy and Equity of Health Care Financing in Australia: 1973–2010

Hajizadeh

Connelly

Butler

2014

Review of Income and Wealth

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Using data from Australian Taxation Statistics and Household Expenditure Surveys we analyze the distribution of health care financing in Australia over almost four decades. We compute Kakwani Progressivity indices for four sources of health care financing: general taxation, Medicare Levy payments, Medicare Levy Surcharge payments, and direct consumer payments, and estimate the effects of major policy changes on them. The results demonstrate that the first three of these sources of health care financing are progressive in Australia, while the distribution of direct payments is regressive. Surprisingly, we find that neither the introduction of Medicare in Australia in 1984 nor the Extended Medicare Safety Net in 2004 had significant effects on the progressivity of health care financing in Australia. By contrast, the Lifetime Cover scheme—introduced in 2000 to encourage people to buy and hold private health insurance—had a progressive effect on health care financing.

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Section: Introductionmentioning

confidence: 99%

Health Policy and Equity of Health Care Financing in Australia: 1973–2010

Hajizadeh

Connelly

Butler

2014

Review of Income and Wealth

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“…Health insurance can either reimburse the insured for expenses incurred from illness or injury or pay the care provider directly. Health insurance has been an important issue and its applications differ among countries: Australia (Connelly et al 2010), Africa Countries (Carapinha et al 2011), Uganda (Basaza et al 2008), South Korea and Taiwan (Lee et al 2008), Ireland (Armstrong 2010), Canada (Devlin et al 2011), the health insurance literature. Two multiattribute methods are used in the evaluation of health insurance options.…”

Section: Introductionmentioning

confidence: 99%

Fuzzy Multiattribute Consumer Choice Among Health Insurance Options

Kahraman

Suder

Bekar

2015

Technological and Economic Development of Economy

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People buy insurance to protect themselves against possible financial loss in the future. Health insurance provides protection against the possibility of financial loss due to health care use. A selection among health insurance options is a multiattribute decision making problem including many conflicting criteria. This problem can be better solved using the fuzzy set theory since human decision making is generally based on vague and linguistic data. We propose an integrated methodology composed of fuzzy AHP and fuzzy TOPSIS to select the best health insurance option. The considered option types, Health Savings Account (HSA), Flexible Spending Accounts (FSA), and Health Reimbursement Arrangement (HRA) are evaluated using eight different criteria under fuzziness. A sensitivity analysis is also realized. With competition increasing among health care plans, employees of large firms typically are faced with more opportunities for choice and more complex options than in the past. Most people understand that an insurance choice may be important for them, but their decision making also appears very limited. The dominant model of choice assumes careful examination and weighing of alternatives, but as the number of choices grows, this becomes an increasingly complex and difficult task.The selection of health plans and providers is, in part, an iterative process in which individuals better learn to make informed choices responsive to their needs. The instability in initial choices, however, suggests considerable failure to understand important differences among plans in access, cost, and freedom to select providers or to be reimbursed for services outside the plan. This is particularly true as populations select plans with which they have had little prior experience. Some preferences seem much more central to people's decisions than others. The primary preferences are related to the character of established doctor/patient relationships, cost, and special needs (Mechanic 1989).There are numerous different health insurance plans available in any country today. Because every person has their own unique situation, determining "the best" health insurance plan will vary from person to person. Situations vary and health insurance plans that are right for one person's situation may not be right for someone else's. This is why we propose a methodology for the selection among health insurance options in this paper.Individual choice over health insurance policies may result in risk-based sorting across plans. People are generally unsuccessful in selecting an alternative with more than four criteria. In approaching choice situations, people immediately make efforts to narrow the number of operative choices to a psychologically manageable set. Typically, individuals consider very few alternatives and focus the comparison only on a subset of the many relevant dimensions. People are more likely to select familiar options. Familiarity may be assessed by prior experience with a particular type of health plan arrangement (Mechanic 1989).The...

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“…Payments by individuals can be uniform (flat rates), geared to ability to pay (e.g., income-based contributions), and/or to expected costs (risk rating, which in turn requires the ability to implement risk adjustment) ( Van de Ven and Ellis 2000). Insurance models may employ single payers, or allow competition among potential insurers; they may also vary in the extent to which they pool resources across groups of individuals, and to which they employ regulatory controls requiring community rating and/or open enrollment (Connelly et al 2010). Various combinations of these mechanisms are found internationally, and an extensive literature points out the advantages and disadvantages of each of these approaches (Donaldson et al 2005;Evans 2004;Getzen 1997;Kutzin 2001;Mossialos et al 2002;Wagstaff et al 1999).…”

Section: Introductionmentioning

confidence: 99%

Four Flavours of Health Expenditures: A Discussion of the Potential Implications of the Distribution of Health Expenditures for Financing Health Care

Deber

Lam

Roos

2014

Canadian Public Policy

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Different categories of services present different policy issues for financing health care. This conceptual paper suggests four categories: (1) public health services for the entire population; (2) basic health care to individuals, where anticipated costs are small and relatively homogeneous; (3) potentially catastrophically expensive services to individuals, where costs are skewed but not predictable; and (4) potentially catastrophically expensive services to individuals, where anticipated costs are both skewed and predictable. Using Canadian and Manitoba data to illustrate some implications of the distribution of health expenditures, we suggest policies suitable for one category of services may not necessarily work for others. The small proportion responsible for incurring high health expenditures are not attractive candidates for voluntary risk pools, particularly in competitive markets.En matière de politiques publiques, le financement des soins de santé doit être analysé de différentes façons selon les types de soins considérés. Dans cet article, nous suggérons quatre catégories de soins :(1) les services de santé publique, offerts à l'ensemble de la population ; (2) les soins individuels de base, dont les coû ts prévus sont assez faibles et plutô t homogènes ; (3) les soins offerts à certains individus et dont les coû ts sont potentiellement catastrophiques, ces coû ts étant faussés et non prévisibles ; et (4) les soins offerts à certains individus et dont les coû ts sont potentiellement catastrophiques, ces coû ts sont faussés mais prévisibles. Pour illustrer certaines implications de la distribution des dépenses en santé, nous utilisons Grâce à des données manitobaines et canadiennes, nous illustrons ensuite certaines implications de la distribution de ces soins ; nous montrons ainsi que des politiques qui conviennent à l'une des catégories de soins ne conviennent pas nécessairement aux autres. Par exemple, à cause de la faible proportion des services associés aux dépenses démesurément élevées, la mise en commun volontaire des risques dans ces cas n'est pas une avenue intéressante, surtout sur des marchés compétitifs.

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Risk equalisation and voluntary health insurance markets: The case of Australia

Cited by 32 publications

References 4 publications

Health Policy and Equity of Health Care Financing in Australia: 1973–2010

Health Policy and Equity of Health Care Financing in Australia: 1973–2010

Fuzzy Multiattribute Consumer Choice Among Health Insurance Options

Four Flavours of Health Expenditures: A Discussion of the Potential Implications of the Distribution of Health Expenditures for Financing Health Care

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