Future financial impact of the current health financing system.

Major political parties remain publicly committed to Medicare and community-rated voluntary health insurance. It is important to understand the future financial consequences of this policy in order to assist community debate about whether such a commitment is appropriate or some other policy should be developed. This paper describes development of, and results from, the APHA health financing model. It suggests that health expenditure would represent 12.9% of gross domestic product by 2021, compared to 8.5% in 1995. Increasing per capita expenditure is the major contributor to the growth, with demographic changes responsible for only 14.3%.