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Private health insurance can lead to interactive effects with the public health system. It is possible that care delivered under private insurance is not replacing public spending, but increasing total national spending on health care. And because comprehensive policies lower the out-of-pocket price for obtaining public services, this type of coverage may increase the use of those services, thereby increasing public spending. This study assesses the impact of private health insurance coverage on the use of health services in New Zealand, using 2002/2003 New Zealand Health Survey data.