Journal article

The effect of income-based mandates on the demand for private hospital insurance and its dynamics.

Thomas C Buchmueller, Terence C Cheng, Ngoc TA Pham, Kevin E Staub

Journal of Health Economics | Elsevier | Published : 2021

Abstract

We examine the effect of an income-based mandate on the demand for private hospital insurance and its dynamics in Australia. The mandate, known as the Medicare Levy Surcharge (MLS), is a levy on taxable income that applies to high-income individuals who choose not to buy private hospital insurance. Our identification strategy exploits changes in MLS liability arising from both year-to-year income fluctuations, and a reform where income thresholds were increased significantly. Using data from the Household, Income and Labour Dynamics in Australia longitudinal survey, we estimate dynamic panel data models that account for persistence in the decision to purchase insurance stemming from unobserv..

View full abstract

University of Melbourne Researchers

Grants

Awarded by Australian Research Council


Funding Acknowledgements

We are grateful to two anonymous reviewers for their helpful comments. K. Staub acknowledges support from the Australian Research Council through grant DE170100644. This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute.