Closed ATM View - Health/2020-21/9683
Private health insurance actuarial studies for Lifetime Health Cover and risk equalisation
Canberra, Sydney, Melbourne, Adelaide, Perth, Brisbane, Darwin, Hobart
The Department of Health is seeking a supplier with actuarial and economic expertise and with private health insurance experience to:
- Investigate the effectiveness of Lifetime Health Cover, including interaction with the Private Health Insurance Rebate and Medicare Levy Surcharge.
- Undertake qualitative and quantitative analysis of prospective risk equalisation approaches.
The Department intends to use the findings of the studies to develop reform options to improve the sustainability, affordability, value, and attractiveness of private health insurance in the context of the Australian healthcare system.
Study One: Private Health Insurance – Lifetime Health Cover
The study will involve:
- a review of the effectiveness of the current settings for Lifetime Health Cover in terms of the impact on private health insurance coverage, affordability, and consumer behaviour; and
- the modelling of alternate Lifetime Health Cover scenarios to improve sustainability, affordability, value, and attractiveness of private health insurance.
Study Two: Private Health Insurance – Risk Equalisation
The study will involve:
- a literature review and international review of prospective risk equalisation approaches;
- an evaluation of available datasets to support prospective risk equalisation approaches;
- development of prospective risk equalisation models to simulate the potential stakeholder impacts; and
- identification of other potential private health insurance regulatory changes to align incentives associated with prospective risk equalisation.
It is the Department’s preference one supplier undertake both studies, however this is not a mandatory condition.
Suppliers who tender for both studies, must provide an individual costing for each study, as well as a combined cost for delivering both studies.
As per the ATM
Within 12 months, commencing in December 2020.