Financial incentives and private health insurance demand on the extensive and intensive margins

Melbourne Institute Working Paper No. 08/23

Date: June 2023


Nathan Kettlewell
Yuting Zhang


In countries with dual public and private healthcare systems, individuals are often incentivised to purchase private health insurance through subsidies and penalty. This paper uses administrative data from Australia to study how high-income earners respond on both the intensive and extensive margins to the simultaneous withdrawal of a premium subsidy, and the increase of a tax penalty.

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