HE3 - A Tale of Two Universal Health Insurance Schemes in One Country: Horizontal Inequality of Government Medical and Pharmaceutical Benefits for Australian Children

Abstract

To assess the progressivity of government spending in the two universal health insurance schemes– Medical and Pharmaceutical benefits– for Australian children. The Medical benefit scheme is designed to be predominantly income-neutral for children and the Pharmaceutical benefit scheme favoring the poor, however the actual distributions of the spending are unknown. Using the birth cohort of the nationally representative Longitudinal Study of Australian Children conducted during 2003-2014 linked with the Medical and Pharmaceutical claims data, we assessed the distributions of out-of-hospital government Medical and Pharmaceutical spending by household income using concentration indices. The distributions of the spending for children over the whole period covering birth to 11 years of age were assessed. Survey population weights were applied in all analysis so that the results are population-representative. Children with no linked claim record or with household income missing were dropped from the analysis, leaving 4853 children (95.0% of the original sample) corresponding to a weight-adjusted population of 225608 children. The results show that despite the strong progressive design of Pharmaceutical benefits, Pharmaceutical spending over 0-11 years of age favored the poor only insignificantly (concentration index -0.067, 95% CI -0.155, 0.023). The Medical spending on the other hand favored the rich slightly (concentration index 0.043, 95% CI 0.028, 0.058), despite its design to be predominantly income-neutral. The total Medical and Pharmaceutical government spending– sum of the two schemes– was slightly pro-rich (concentration index 0.035, 95% CI 0.018, 0.052). The income-related distributions of the publicly funded, universal, Medical and Pharmaceutical benefits for children in Australia slightly deviated from their designs regarding income, which may reflect differences in parents’ healthcare-seeking preferences and access or barriers to health. Results will inform the design and reform of universal health insurance schemes especially for young children.