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This paper analyses the substantial financial subsidy, alongside other regulatory changes, introduced to support private health insurance in Australia at the end of the 1990s. The concept of policy layering is developed and refined theoretically in terms of changes in policy paradigms in order to chart a lengthy period of tense layering in Australian health-care politics between private and public health insurance and the bipartisan convergence on a universalism plus choice policy paradigm during the 1990s. This is the key dynamic underlying the Coalition's support of private health insurance after 1996 rather than a neo-liberal ambition to dismantle the health-care state and return to a predominately privately financed health-care system with a residual, public safety net.
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