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4815.0.55.001 - Private Health Insurance, 2001  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 01/10/2003   
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Private health insurance data sources

  • The 1995 National Health Survey (NHS)

Estimates from the 1995 NHS on private health insurance contained in this publication, and as part of future data requests, may differ slightly from previously published 1995 data on private health insurance (such as in Private Health Insurance, Cat.no. 4334.0). This is due to the use of a revised weighting strategy for the private health insurance component of the 1995 NHS.

For further information on the scope of this survey and reliability of the estimates, see 'National Health Survey: Private Health Insurance', Cat.no. 4334.0, 1995.

  • The 2001 National Health Survey (NHS)

Differences between sample design and survey methodology for the 2001 NHS and the 1995 NHS may affect the degree to which data are directly comparable between the surveys. These include the size of the sample population and the method of sampling for the surveys.

Private health insurance information was not collected for children aged less than 15 years in the 2001 NHS. However, data can be imputed for 0-14 year olds and provided on request. Imputation is based on a number of conditions and assumptions. Two key conditions were that the adult 'type of private health insurance' was assigned to the child where the adult was a parent and the type of cover was 'family' or 'sole parent'. The assumptions are that children in a household belong to the same family unit as the adult, parents with a 'family membership' are covering all children and not just select children in a household, and that it is unlikely that children will have private health insurance coverage without their parents being covered.

For further information see 'National Health Survey:Summary of Results', Cat.no. 4364.0, 2001.

  • The 1998 Private Health Insurance Survey (PHIS)

The Private Health Insurance Survey was able to group people into 'contributor units', which was not possible with the 1995 NHS due to the smaller size of the data set and the way in which the data was collected for this survey.
A 'contributor unit' applies to families and the individual members or groups of members of families as defined by their private health insurance arrangements. A contributor unit with private health insurance consists of a 'contributor' plus all persons in the same family who are covered by the health insurance arrangements of the contributor.

Note that previously published data from this survey may differ from data in the 1998 file due to weighting methodologies.

For further information about comparability and other survey issues, See 'Health Insurance Survey', Cat. no.4335.0, 1998.

ABS Surveys: Comparability

Direct comparison of the level and type of private health insurance for the three ABS sources given is only possible for adults aged 18 and over, as data from the 1995 NHS is only available for this age group. However, comparison between 1998 and 2001 is possible for adults aged 15 years and over.
Direct comparison between 1998 and 2001 for private health insurance and income is limited due to the use of 'contributor units' rather than persons (with income comparisons) in 1998.
  • The Private Health Insurance Administration Council (PHIAC)

The Private Health Insurance Administration Council (PHIAC) is an independent Statutory Authority that regulates the private health insurance industry. In addition, PHIAC collects and disseminates financial and statistical data regarding health funds and collects and disseminates information about private health insurance.

PHIAC derive their percentages for membership and coverage using ABS population estimates for the population base. Any differences between PHIAC and ABS statistics may, in part, be due to the different sources of the information as well as how the information is reported. As discussed in section 2, PHIAC generally report private health cover as it relates to those with hospital insurance (i.e. excluding those with 'ancillary only' cover), while the ABS estimates include all types of private health insurance ('hospital and ancillary', 'hospital only', and 'ancillary only').

For further information, see www.phiac.gov.au.


Private health insurance: Federal Government policies

Private Health Insurance Incentives Scheme (PHIIS)
Introduced by the Federal Government from 1 July 1997, this scheme offered financial incentive to encourage individuals and families to take out, or maintain, private health insurance cover. These incentives were delivered either in the form of reduced premium or payment as a taxation rebate at the end of the financial year. Rebates were paid to single people with an annual income less than $35,000; couples with annual income less than $70,000; and families with annual income less than $70,000. Under PHIIS, those people without private health insurance had an additional Medicare levy surcharge of 1% applied if their annual incomes were over a certain level. This 1% surcharge applied to single people on incomes higher than $50,000, couples with incomes of more than $100,000, and families with incomes greater than $100,000 (plus $1,500 for each child after the first).

Federal Government 30% rebate on private health insurance
Replaced the Private Health Insurance Incentives Scheme (PHIIS) rebate from 1 January 1999 and is available to every contributor, whatever their level of cover, income or type of membership. The rebate is equal to 30% of the cost of private health insurance premiums on hospital cover, ancillary cover and a combination of both. In order to claim the rebate the health insurance policy must be with a registered private health insurance fund and be eligible to claim benefits under Medicare. The 1% Medicare levy surcharge from the PHIIS was retained.

Lifetime Health Cover
Introduced by the Federal Government from 15 July 2000 (extended from 1 July), this scheme required health funds to set different premiums depending on the age when a member first joined with a registered health fund for hospital cover. People who take out hospital cover by the time they are 30 and maintain their membership pay lower premiums throughout their lifetime relative to people who delay joining. A grace period of 12 months - from July 1999 to 14 July 2000 - was provided during which people who were not members could join a health fund and be treated as existing members, that is, as if they had joined when they were 30. People who join after the age of 30 pay a two per cent premium loading for each year they delay joining. The loading is capped at a maximum of 70 per cent above the premium payable by a person who joins at the age of 30.


Conceptual issues

Equivalence scales
Equivalence scales have been devised to make adjustments to the actual incomes of households in a way that enables analysis of the relative wellbeing of households of different size and composition. For example, it would be expected that a household comprising two people would normally need more income than a lone person household if the two households are to enjoy the same standard of living. The equivalence scale used to obtain equivalised incomes is the modified method used in studies by the Organisation for Economic Co-operation and Development (OECD). For further information, see Household Income and Income Distribution, Australia, 2000-01 (Cat.no.6523.0), Appendix 2.

Income unit
An income unit may comprise one person or group of related persons (de facto or registered marriage or parent/dependent child relationship) within a household whose command over income is assumed to be shared. An income unit may therefore include the partner (or couples), all children aged less than 15 years, and children aged 15-24 years provided they are unmarried, full-time students and do not have dependents of their own.
In the 2001 NHS, income unit income is the sum of the respondent's cash income and the cash income of their spouse/partner (where applicable). The income of any children within the units is not included.


REFERENCES

Australian Bureau of Statistics, Australian Social Trends, 2003 (Cat.no.4102.0).

Australian Bureau of Statistics, Health Insurance Survey, Australia, 1998 (Cat.no.4335.0).

Australian Bureau of Statistics, Household Income and Income Distribution, Australia, 2000-01 (Cat.no.6523.0).

Australian Bureau of Statistics, National Health Survey: Private Health Insurance, Australia, 1995 (Cat.no.4334.0).

Australian Bureau of Statistics, National Health Survey: Summary of Results, Australia, 2001 (Cat.no.4364.0).

Commonwealth Department of Health and Aged Care, December 1998 (Circular HBF 547).

Commonwealth Department of Health and Aged Care, Fact Sheet 9: Lifetime Health Cover, http://www.health.gov.au/pubs/budget99/fact/hfact9.htm.

Private Health Insurance Administration Council (PHIAC), Data supplied on request.

Private Health Insurance Administration Council (PHIAC), http://www.phiac.gov.au.

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