A Carrot and a Big Stick

Understanding Private Health Insurance and Older Australians

Healthy and productive ageing rests considerably upon timely and affordable access to health care. In the near future, expenditure on health care is expected to rise as population ageing places heavier demands on the public health care system.

The Federal Treasury projects government expenditure on health care on those aged 65 and over is to increase seven-fold from 2010 to 2050 – and 12-fold for the over 85 age group over the same period.

In the context of ongoing reforms, it is important to understand changes in the numbers and proportions of older Australians that are insured, as they represent a population that is particularly pre-disposed to requiring surgery, hospital care and other health services.

Knowledge of health insurance coverage of older persons is also important because international studies have shown those who lack appropriate insurance coverage are at greater risk of disability, are unable to access necessary drugs, pay high out-of-pocket health care expenses and are less likely to seek health care services.

This report seeks to update earlier studies by answering the following questions in the context of the most recent reforms:

What proportion and number of Australians aged over 50 are covered by private health insurance and how has this changed over a period of significant reform (1997 to 2011)? What are the reasons that older Australians give for purchasing or not purchasing private health insurance? What are the characteristics of older Australians with and without cover, and are there differences in the type of coverage?

The purpose of this paper is not to suggest policy prescriptions, but rather describe the patterns of health insurance purchase amongst older Australians in a recent period of considerable policy change.

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