Age penalties and take-up of private health insurance.

Financial penalties for delayed enrollment could be useful tools to encourage people to enroll earlier in health insurance markets, but little is known about how effective they are. We use a large administrative dataset for a 10% random sample of all Australian tax-filers to study how people respond to a step-wise age-based penalty, and whether the effect has changed over time. Individuals must pay a 2% premium surcharge for each year they delay enrollment beyond age 31. The penalty stops after 10 years of continuous hospital cover. The age-based penalty creates discontinuities in the incentive to insure by age, which we exploit to estimate causal effects. We find that people respond as expected to the initial age-penalty, but not to subsequent penalties. The 2% premium loading results in a 0.78-3.69 percentage points (or 2.1%-9.0%) increase in the take-up rate at age 31. We simulate the penalty impact and implications of potential reforms, and conclude that modest changes around the policy make little difference in the age distribution of insured, premiums or take-up rates. Our study provides important evidence on an understudied area in the literature and offers insights for countries considering financial penalties.

The Australian Twins Economic Preferences Survey.

This article describes the Australian Twins Economic Preferences Survey (ATEPS). The data set comprises a wide variety of preference and behavioral measures (risk aversion, impatience, ambiguity aversion, trust, confidence) elicited using incentivized decision tasks. One-thousand one-hundred twenty Australian adult twins (560 pairs) completed the survey, making it one of the largest data sets containing incentivized preference measures of twins. As the survey was conducted during the COVID-19 pandemic, we also collected information on experiences related to the pandemic, along with a variety of questions on political attitudes and mental wellbeing. We hope that ATEPS can make a valuable contribution to social science and genetics research.

The informational content of subjective expectations for health service use.

BACKGROUND: This study aims to evaluate the informational content of people's subjective probability expectations for using various health services. METHODS: Using a sample of 1,528 Australian adults (25-64 years), I compared stated probabilities of visiting various health service providers (hospitals, dentists, optometrists, physiotherapists and related care providers, naturopaths and massage therapists) with past utilization and with predicted utilization estimated out-of-sample. I also estimated whether past utilization and subjective expectations were predicted by the same covariates. Finally, I estimated whether subjective expectations had predictive power for the choice to purchase private health insurance conditional on past utilization and other controls. RESULTS: Subjective expectations closely reflect patterns of observed utilization, are predicted by the same covariates as observed utilization, and correlate with objective measures of risk. Subjective expectations also add predictive power to models estimating insurance take-up, even after conditioning on prior health care use and other risk factors. CONCLUSION: The findings are indicative that on average people form quite accurate expectations, and support collecting subjective expectations about health services in household surveys for use in applied research.

Family formation and the demand for health insurance.

We study how demand for health insurance responds to family formation using a unique panel of young Australian women. Our data allow us to simultaneously control for the influence of state dependence and unobserved heterogeneity and detailed information on children and child aspirations. We find evidence that women purchase insurance in preparation for pregnancy but then transition out of insurance once they have finished family building. Children have a large, negative impact on demand for insurance, although this effect is smaller for those on higher incomes. We also find that state dependence has a large impact on insurance demand. Our results are robust to a variety of alternative modelling strategies.

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

In countries with dual public and private healthcare systems, individuals are often incentivized to purchase private health insurance through subsidies and penalty. We use 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. We estimate regression discontinuity models by exploiting discontinuous changes in the penalty and subsidy rates. Our setting is particularly interesting because means testing creates different incentives at the extensive and intensive margins. Specifically, we could expect to see higher take-up of insurance coupled with downgrading to less expensive plans. We find evidence that the penalty - despite being large in value - only has a modest effect on take-up. Our results show little evidence of downgrading, which is consistent with a low price elasticity for the high-income earners we study.

Retirement, social support and mental well-being: a couple-level analysis.

Social support is increasingly acknowledged as an important resource for promoting well-being. We test whether social support changes around retirement. We also examine whether social support moderates dynamics in mental well-being around retirement and consider both own and spouse's retirement drawing on a unique longitudinal, couple-level data set from Australia. We observe descriptively no effect of own or spouse's retirement on social support. However, those with high social support do experience a small but statistically significant improvement in mental well-being post retirement. Using pension eligibility as an instrument, we find that own retirement causally improves mental well-being for women and by a similar degree for those with low/high social support. We also estimate responses to life satisfaction and find evidence that spill-over benefits from spousal retirement are larger for individuals with low social support.

Psychological, social and cognitive resources and the mental wellbeing of the poor.

Our study takes advantage of unique data to quantify deficits in the psychosocial and cognitive resources of an extremely vulnerable subpopulation-those experiencing housing vulnerability-in an advanced, high-income country (Australia). Groups such as these are often impossible to study using nationally representative data sources because they make up a small share of the overall population. We show that those experiencing housing vulnerability sleep less well, have more limited cognitive functioning, and less social capital than do those in the general population. They are also less emotionally stable, less conscientious, more external, and more risk tolerant. Collectively, these deficits in psychosocial and cognitive resources account for between 24-42% of their reduced life satisfaction and their increased mental distress and loneliness. These traits also account for a large proportion of the gap in mental wellbeing across different levels of housing vulnerability.

The differential impact of major life events on cognitive and affective wellbeing.

Major life events affect our wellbeing. However the comparative impact of different events, which often co-occur, has not been systematically evaluated, or studies assumed that the impacts are equivalent in both amplitude and duration, that different wellbeing domains are equally affected, and that individuals exhibit hedonic adaptation. We evaluated the individual and conditional impact of eighteen major life-events, and compared their effects on affective and cognitive wellbeing in a large population-based cohort using fixed-effect regression models assessing within person change. Several commonly cited events had little, if any, independent effect on wellbeing (promotion, being fired, friends passing), whilst others had profound impacts regardless of co-occurring events (e.g., financial loss, death of partner, childbirth). No life events had overall positive effects on both types of wellbeing, but separation, injury/illnesses and monetary losses caused negative impacts on both, which did not display hedonic adaptation. Affective hedonic adaptation to all positive events occurred by two years but monetary gains and retirement had ongoing benefits on cognitive wellbeing. Marriage, retirement and childbirth had positive effects on cognitive wellbeing but no overall effect on affective wellbeing, whilst moving home was associated with a negative effect on cognitive wellbeing but no affective wellbeing response. Describing the independent impact of different life events, and, for some, the differential affective and life satisfaction responses, and lack of hedonic adaptation people display, may help clinicians, economists and policy-makers, but individual's hopes for happiness from positive events appears misplaced.