NATSEM Seminar Series

Estimating key parameters for long term care insurance in Australia

Tue 9 May 2017Dr David Cullen / 11:00am-12:00pmSeminar Room 1, Building 24, University of Canberra

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About the Talk

In 2014-15, around 1.3 million older Australians were supplied with aged care services by over 2,000 service providers. Currently, the Australian Government finances its contribution to aged care on a pay as you go basis, from general taxation. Cullen and Ergas (2007) and Ergas and Paolucci (2011) have suggested that the fiscal risks imposed on the Commonwealth by the current pay-as-you-go arrangements have led to regulatory arrangements that seriously distort the aged care market and impose substantial risk on consumers. Because of population ageing, these risks are much more pressing now than when the prohibition on long term care insurance was introduced. They suggest that the introduction of a designed universal competitive mandatory insurance scheme could address these issues, noting that significant design and transition issues would need to be addressed. This paper seeks to establish an evidence base for the basic parameters of any Australian long term care insurance scheme by examining, and forecasting, the lifetime risk of needing aged care, and the statistical distribution of the usage of aged care services by those who need those services. The analysis is based on deidentified unit record data for the million individuals who received subsidised permanent residential aged care at some time between 1 July 1998 and 30 June 2016.

Presentation slides can be viewed here 

About the Speaker

Dr David Cullen is currently the Principal Economist at the National Disability Insurance Agency.

He was previously the Chief Economist at the Australian Department of Health and is a past President of the OCED’s Expert Group on the Economics of Prevention. He is a graduate of the Australian National University in pure and applied mathematics and in philosophy. His PhD thesis was concerned with the Equivalence of Linear Systems and he has published in several academic fields including pure mathematics, higher education, economics and public policy.

David has advised the Australian Government on social policy issues for the last two decades and was the principal  author of the 2012 Living Longer Living Better Aged Care Reform Package. - a 10 year program of micro-economic reforms to create a flexible and seamless system that provides older Australians with more choice, control and easier access to a full range of services.

David’s knowledge of Australia's health and aged care system and expertise in public policy, health economics and data analysis has been recognised through a number of national and international awards and appointments. He was awarded Australia Day Achievement Medallions in 2011 and 2013 for his contributions to aged care reform in Australia. He is currently an Honorary Professor in Health Economics at the Australian National University and an Adjunct Professor in Health Economics and Aged Care Policy at NATSEM.


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