Can the Hilda survey offer additional insight on the impact of the Australian lifetime health cover policy? A regression discontinuity approach using panel data

Abstract: The focus of this paper is on the partial replication and reevaluation of the work of Palangkaraya and Yong (2007) regarding the impact of the lifetime health cover policy in Australia. The analysis is performed using data on single person households obtained from the Hilda survey. The method used is a regression discontinuity design applied to a panel data material with age as the forcing variable. The analysis consist of two parts, the first is a strict replication of the linear probability estimate of Palangkaraya and Yong (2007). In the second part a regression discontinuity approach more suitable for the data material is utilized. The general result is inconclusive, the strict replication of the linear probability model indicate an insignificant treatment effect. The regression discontinuity analysis show varying levels of significance depending on the bandwidth used. As indicated by the contradictory estimates, it cannot be ruled out that the regression discontinuity design is invalid and therefore offer no additional insight on the effect of the lifetime health cover policy.