Experiencing a severe cyclone can profoundly affect Australians, particularly in their financial decisions regarding health insurance. Research analyzing over 20 years of data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, combined with historical cyclone records, has revealed that individuals exposed to category 5 cyclones are significantly more likely to take out private health insurance.
The Research Methodology
The study compared health insurance status before and after cyclones for the same individuals, using the comprehensive HILDA survey data that follows over 17,000 people since 2001. By matching this data with records of more than 100 cyclones that crossed Australia during the same period, researchers could isolate the impact of cyclones on health insurance decisions.
Key Findings
- Only category 5 cyclones, with wind speeds exceeding 200 km/h, had a clear effect on increasing private health insurance uptake.
- Cyclone Yasi, a category 5 cyclone in 2011, led to a significant increase in health insurance coverage among affected populations.
- The increase was more pronounced among younger individuals, higher earners, and those living in coastal or cyclone-prone areas.
- Proximity to the cyclone’s path strengthened the effect, with individuals within 40km being more than 5 percentage points more likely to acquire health insurance.
Policy Implications
The impact of severe cyclones on private health insurance uptake can be stronger than some national policies designed to encourage coverage. For example, the Medicare Levy Surcharge and Lifetime Health Cover loading policies resulted in lower increases in insurance uptake compared to the effect of a severe cyclone.
Understanding the Behavior
The decision to purchase health insurance post-cyclone is likely driven by the emotional and practical disruptions caused by these events. Home damage and psychological stress can lower individuals’ sense of control and increase health concerns, prompting them to seek protection through insurance. Higher-income individuals were more likely to respond in this way, suggesting that targeted policies could help ensure that vulnerable populations are not left behind.
Conclusion
The findings suggest that disaster response policies should consider the psychological impact of severe cyclones and potentially offer targeted support, such as private health insurance subsidies or improved healthcare access, to vulnerable populations.
