The Australian healthcare system is characterized by a mix of public and private financing and provision of healthcare services. The health insurance system consists of a National Health Insurance/Service and voluntary private health insurance (PHI). The latter is regulated through the Private Insurance Act (2007) which established a complex mix of subsidies and regulatory instruments (e.g., community rating, open enrollment, ad valorem premium-subsidies and tax-incentives), and provides for the operation and administration of the Risk Equalization Trust Fund. The Australian health plan payment scheme constitutes a combination of risk sharing and risk equalization. The duplicative nature of the current private/public mix (those with PHI remain covered by the national public system) and the potentially inefficient mix of subsidies have contributed to some important issues such as overinsurance, a high market concentration, risk selection, market segmentation, and a misallocation of subsidies. Increasingly, concerns are rising about the affordability, efficiency, and sustainability of the Australian healthcare system.

Australia, Private health insurance, Risk equalization, Risk sharing,
Erasmus University Rotterdam

Paolucci, F, Sequeira, A.R, Fouda, A.M.M.A, & Matthews, A. (2018). Health plan payment in Australia. In Risk Adjustment, Risk Sharing and Premium Regulation in Health Insurance Markets: Theory and Practice (pp. 181–208). doi:10.1016/B978-0-12-811325-7.00006-3