There were 8,671,106 people who claimed the 30% private health insurance rebate in Australia at 30 June 2001 (46.1% of the Australian population). Of these, 6,468,996 were residents of capital cities and other major urban centres (74.6%) and 2,202,110 were residents of the rest of state/territory areas (25.4%).
Table shows the prevalence of private health insurance by socioeconomic status of the postcode of the insured. Confirming previous studies of prevalence of health insurance in Australia, there is a statistically significant [7
] socioeconomic gradient for prevalence, with postcodes in the highest socioeconomic status decile having, on average, almost 70% of residents covered by health insurance compared to residents of the most disadvantaged decile, with a take-up of less than 30%. Not surprisingly, this average figure is also confirmed for postcodes falling within capital cities and major urban centres, with again about 70% of residents in the wealthiest urban postcodes having health insurance compared to fewer than 30% in the most disadvantaged postcodes.
Private health insurance cover and estimated rebate payments for residents of capital cities and rest of State/Territory1, by socioeconomic status, June 2001
Table also shows the results for non urban centres, including regional cities (of less than 100,000 population) and rural areas. Here we see a quite different pattern of coverage. Again, fewer than 30% of residents in the most disadvantaged decile are covered by private health insurance but, in contrast to the over 70% prevalence in capital cities and other major urban centres, the coverage of private health insurance in the top decile in the rest of the state is much lower, being less than 50%. Although smaller, the difference between these figures is still statistically significant.
There is also strong correlation at the small area level between the distribution of the population with private health insurance cover and socioeconomic disadvantage, as measured by the IRSD; a correlation coefficient of 0.60.
There is a similar distinction in terms of coverage analysed by party affiliation (Figure ). Within the overall rate of 46.1% of the population covered by private health insurance with hospital cover, seats held by the Liberal Party had an above average coverage of health insurance of 50% [CI: 50.23 ± 0.05] and those held by the other parties and independents had below-average rates: 43% [42.90: ± 0.04] for seats held by the Australian Labor Party; 42% [41.71: ± 0.1] for the National Party; 42% [42.12: ± 0.41] for the Country Liberal Party; and an average of 43% [42.93: ± 0.20] across the three electorates held by independents. These differences are statistically significant.
Figure 1 Private health insurance by federal electorate, Australia, 30 June 2001. Source: Compiled from data provided by the Senate Community Affairs Legislation Committee .
The range of coverage is from an estimated 23% [22.51: ± 0.28] in the Labor-held seat of Lingiari, in the Northern Territory to over three and a half times (3.6) higher at 82% [81.89: ± 0.50] in the Liberal-held seat of Bradfield, on Sydney's north shore. There is a notable gap of 20.1 percentage points between the Liberal- and Labor-held seats with the highest rates of private health insurance. That is, an estimated 81.9% of the population in the Liberal-held seat of Bradfield were insured in 2001, compared with some 24.6% fewer in (the Labor-held seat of) Jagajaga, with a rate of 61.8%.
Estimates of the allocation of the rebate by socioeconomic status, shown in Table ), were limited to quintiles (for which the data were available from ABS); these have been aligned with the equivalent deciles. These estimates reflect the marked and statistically significant differences seen in coverage rates for the capital cities and for Australia as a whole; differences related to socioeconomic status.
Notably, for capital cities, the estimated per capita rebate paid to those living in the highest socioeconomic status areas is nearly four times that paid to those in the lowest socioeconomic status areas (a statistically significant rate ratio of 3.84). This represents a substantial transfer of funds to the most well-off, and is a substantially wider gap than exists for private health insurance cover, of 2.48. The difference in these two rate ratios is likely to reflect the larger sums paid for cover, with fewer products purchased with high levels of front-end deductibles, and more products without front-end deductibles, by those in the highest socioeconomic status areas. Also of interest is the strong, continuous gradient evident across the socioeconomic groups, with estimate rebate payments decreasing with each increase in socioeconomic disadvantage (Figure ).
Estimated rebate payments for people with private health insurance cover, capital cities, Australia, 30 June 2001.
For the non-urban areas, however, the reverse applies, with estimated rebate payments increasing with increasing disadvantage then declining in the most disadvantage areas. The reasons for this are not clear. One factor contributing to the low estimate in the highest socioeconomic status areas may be the way in which the quintiles are constructed. The areas in the highest socioeconomic status quintile tend to be the towns and other heavily populated areas on the fringes of the capital cities, and the insured population in these areas may be more likely to purchase products with high levels of front-end deductibles, thus reducing the rebate they receive.