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Longitudinal Study: HILDA
Title: Adverse selection in Australian private health insurance
Authors: Nguyen, Lan
Worthington, Andrew C
Publication Date: Jul-2021
Pages: 3884719
Keywords: Private Health insurance
adverse selection
advantageous selection
health risk factors
self-assessed health
Abstract: We assess adverse selection in Australian private health insurance using the longitudinal data in the Household, Income, and Labour Dynamics in Australia (HILDA) Survey. Cross-sectional and balanced panel probit regressions specify the demand for health insurance as a function of self-assessed health condition, health risk factors, and socioeconomic controls including age, income, education, family structure, and welfare status. We find that while adverse selection is present, it has decreased over time, likely through a combination of deliberate government policy and changes in market conditions, combined with the impact of heterogeneous preferences and risk aversion. We also identify a tendency for advantageous selection in the insured pool.
DOI: 10.2139/ssrn.3884719
Research collection: Journal Articles
Appears in Collections:Journal Articles

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