interviewed. Respondents have been followed across time and interviews are
conducted every 12 months. New household members are included in subsequent
interview waves, while ever they share a household with a baseline respondent. The
survey covers questions on income, expenditures, education, occupation and other
roles, demographics, health, family formation, risk behaviours, attitudes and life
events. The HILDA sample and method have been described in detail elsewhere
(http://melbourneinstitute.com/hilda/).
In Wave 4 of HILDA conducted in 2004 respondents were asked a series of questions
on private health insurance and hospital usage. Did respondent currently have private
health insurance? If yes, did it include hospital cover? When did he/she join? And if
he/she joined in 2000 was that as a response to the LHC policy? If the respondent was
not currently insured, had he/she ever had hospital cover in the past and if so how
long ago did he/she drop hospital cover?
From these questions we created six groups based on the respondent’s most recent
decision in relation to the purchase of private hospital cover insurance.
1. Joined Prior: those who purchased private hospital cover before Lifetime
Health Cover.
2. Joined because of Lifetime Health Cover (LHC): those who stated they took
up private hospital cover in 2000 because of LHC.
3. Joined After: those who took up private hospital cover after 2000.
4. Left After: those who dropped private hospital cover after 2000.
5. Left Prior: those who had dropped private hospital cover before 2000,
including those who still held extras cover.
6. Never: those who had never purchased private hospital cover, including those
who had only ever held ancillary cover.
Since the questions on private health insurance cover were only asked in Wave 4 of
HILDA we adopted a retrospective cohort approach to model the factors related to
private health insurance decisions. The outcome was most recent decision in relation
to the purchase of private hospital cover insurance in Wave 4 of HILDA. The
explanatory variables were responses recorded in Wave1 of HILDA. We chose Wave
1 as the baseline because that was the closest time period to the 2000 policy changes
and therefore was the best available measure of the respondent’s status at the time of
the policy changes. In addition differences between Waves 1 and 2 in income,
financial assets and health were calculated to measure the effect of prospective
changes after 2001 on more recent decisions to purchase or drop private hospital
cover after the introduction of LHC.
Explanatory variables fall into five categories:
1. Demographic variables included age, sex, region of residence, education,
occupation, country of birth and languages spoken other than English. Family
formation variables included couple status, the number of respondent’s
resident children < 25 years and the age of the youngest resident child.
2. Health variables included long-term illness or disability, the Short Form
Health Survey (SF-36) items and scales, alcohol consumption, smoking status
and exercise.