Premium subsidies and demand for private health insurance: results from a regression discontinuity design
This article investigates the impact of a private health insurance (PHI) subsidy on the demand for PHI in the context of the Australian health care system. In particular, we focus on the subpopulation of elderly Australians and exploit discontinuous increases to the universal 'PHI rebate' that occur when people turn 65 and 70 years. Using a regression discontinuity design, we find the policy has little effect on take-up of PHI and is best interpreted as a wealth transfer to elderly Australians who already have insurance.
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