Why do some wealthy people leave money on the table by not buying private hospital insurance?
Melbourne Institute Research Insight No. 10/21
Date: July 2021
One in three high-income earners choose not to take out private hospital insurance, even though they could save money by avoiding the Medicare Levy Surcharge. A reason behind this decision is that these individuals are happy to use public hospitals. This suggests that people may be unaware that they are being financially penalised on their taxes, or that the incentives for purchasing private insurance are not working. In this Research Insight, Professor Yuting Zhang and Dr Kushneel Prakash use data from the Taking the Pulse of the Nation survey to study how income is associated with the take-up rate of PHI.