Author
Best, R., Tuncay Alpanda, Berna
Publication Date
2023
Publication Place
-
Cambridge University Press
Subject
Financial assets, Health expenditure, Health policy, Income, Means testing, Private health insurance, Wealth
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
1744-1331
Record ID
80f17ed6-9f63-4839-82b7-640b60d0f402
Library Location
Economics
Date
2023
Sample Text
Studies of health care expenditure often exclude explanatory variables measuring wealth, despite the intuitive importance and policy relevance. We use the Household, Income and Labour Dynamics in Australia Survey to assess impacts of income and wealth on health expenditure. We investigate four different dependent variables related to health expenditure and use three main methodological approaches. These approaches include a first difference model and introduction of a lagged dependent variable into a cross-sectional context. The key findings include that wealth tends to be more important than income in identifying variation in health expenditure. This applies for health variables which are not directly linked to means testing, such as spending on health practitioners and for being unable to afford required medical treatment. In contrast, the paper includes no evidence of different impacts of income and wealth on spending on medicines, prescriptions or pharmaceuticals. The results motivate two novel policy innovations. One is the introduction of an asset test for determining rebate eligibility for private health insurance. The second is greater focus on asset testing, rather than income tests, for a wide range of general welfare payments that can be used for health expenditure. Australia's world-leading use of means testing can provide a test case for many countries.
DOI
10.1017/S1744133123000129
