National health insurance
Encyclopedia
National health insurance (sometimes called statutory health insurance) is health insurance
that insures a national population for the costs of health care
and usually is instituted as a program of healthcare reform. It is enforced by law. It may be administered by the public sector, the private sector, or a combination of both. Funding mechanisms vary with the particular program and country. National or Statutory health insurance does not equate to government run or government financed health care, but is usually established by national legislation. In some countries, such as Australia's Medicare system or the UK's NHS, contributions to the NHI or SHI system are made via taxation and therefore are not optional even though membership of the health scheme it finances is. in practice of course, most people paying for NHI will join the insurance scheme. Where the NHI scheme involves a choice of multiple insurance funds, the rates of contributions may vary and the person has to choose which insurance fund to belong to. In the United States, the Patient Protection and Affordable Care Act
includes a
"health insurance mandate
" that produces the same effect as NHI or SHI, though relies more heavily on the private market than their public sector (Medicare, Medicaid, and S-CHIP) than most countries.
system, with origins dating back to Otto von Bismarck
's social legislation, which included the Health Insurance Bill of 1883, Accident Insurance Bill of 1884, and Old Age and Disability Insurance Bill of 1889. In Britain, the National Insurance Act 1911
marked the first steps there towards national health insurance, covering most employed persons and their financial dependents and all persons who had been continuous contributors to the scheme for at least five years whether they were working or not. This system of health insurance continued in force until the creation of the National Health Service
in 1948 which extended health care security to all legal residents. Most other countries national health insurance systems were implemented in the period following the Second World War as a process of deliberate healthcare reform, intended to make health care affordable to all, in the spirit of Article 25 of the Universal Declaration of Human Rights
of 1948 by nations which had adopted the declaration as signatories. The US did not ratify the social and economic rights
sections, including Article 25's right to health
.
as single-payer health care
. The provision of services may be either through health care providers that may be publicly or privately owned.
An alternative funding approach is where countries implement national health insurance by legislation requiring compulsory contributions to competing insurance funds. These funds (which may be run by public bodies, private for-profit companies, or private non-profit companies), must provide a minimum standard of coverage and are not allowed to discriminate between patients by charging different rates according to age, occupation, or previous health status. To protect the interest of both patients and insurance companies, the government establishes an equalization pool
to spread risks between the various funds. The government may also contribute to the equalization pool as a form of health care subsidy. This is the model used in the Netherlands.
Other countries are largely funded by contributions by employers and employees to sickness funds. With these programs, funds do not come from the government, and neither from direct private payments. This system operates in countries such as Germany
and Belgium
. Usually characterization is a matter of degree: systems are mixes of these three sources of funds (private, employer-employee contributions, and national/sub-national taxes). These funds are usually not for profit institutions run solely for the benefit of their members.
In addition to direct medical costs, some national insurance plans also provide compensation for loss of work due to ill-health, or may be part of wider social insurance
plans covering things such as pensions, unemployment, occupational retraining, and financial support for students.
National schemes have the advantage that the pool or pools tend to be very very large and reflective of the national population. Health care costs, which tend to be high at certain stages in life such as during pregnancy and childbirth and especially in the last few years of life can be paid into the pool over a lifetime and be higher when earnings capacity is greatest to meet costs incurred at times when earnings capacity is low or non existent. This differs from the private insurance schemes that operate in some countries which tend to price insurance year on year according to health risks such as age, family history, previous illnesses, and height/weight ratios. Thus some people tend to have to pay more for their health insurance when they are sick and/or are least able to afford it. These factors are not taken into consideration in NHI schemes. In private schemes in competitive insurance markets, these activities by insurance companies tend to act against the basic principles of insurance which is group solidarity.
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
that insures a national population for the costs of health care
Health care
Health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers...
and usually is instituted as a program of healthcare reform. It is enforced by law. It may be administered by the public sector, the private sector, or a combination of both. Funding mechanisms vary with the particular program and country. National or Statutory health insurance does not equate to government run or government financed health care, but is usually established by national legislation. In some countries, such as Australia's Medicare system or the UK's NHS, contributions to the NHI or SHI system are made via taxation and therefore are not optional even though membership of the health scheme it finances is. in practice of course, most people paying for NHI will join the insurance scheme. Where the NHI scheme involves a choice of multiple insurance funds, the rates of contributions may vary and the person has to choose which insurance fund to belong to. In the United States, the Patient Protection and Affordable Care Act
Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act is a United States federal statute signed into law by President Barack Obama on March 23, 2010. The law is the principal health care reform legislation of the 111th United States Congress...
includes a
"health insurance mandate
Health insurance mandate
A health insurance mandate is either an employer or individual mandate to obtain private health insurance, instead of a National Health Service or National Health Insurance.-United States:...
" that produces the same effect as NHI or SHI, though relies more heavily on the private market than their public sector (Medicare, Medicaid, and S-CHIP) than most countries.
History
Germany has the world's oldest national health insurance, through the world's oldest universal health careUniversal health care
Universal health care is a term referring to organized health care systems built around the principle of universal coverage for all members of society, combining mechanisms for health financing and service provision.-History:...
system, with origins dating back to Otto von Bismarck
Otto von Bismarck
Otto Eduard Leopold, Prince of Bismarck, Duke of Lauenburg , simply known as Otto von Bismarck, was a Prussian-German statesman whose actions unified Germany, made it a major player in world affairs, and created a balance of power that kept Europe at peace after 1871.As Minister President of...
's social legislation, which included the Health Insurance Bill of 1883, Accident Insurance Bill of 1884, and Old Age and Disability Insurance Bill of 1889. In Britain, the National Insurance Act 1911
National Insurance Act 1911
The National Insurance Act 1911 is an Act of Parliament of the United Kingdom. The Act is often regarded as one of the foundations of modern social welfare in the United Kingdom and forms part of the wider social welfare reforms of the Liberal Government of 1906-1914...
marked the first steps there towards national health insurance, covering most employed persons and their financial dependents and all persons who had been continuous contributors to the scheme for at least five years whether they were working or not. This system of health insurance continued in force until the creation of the National Health Service
National Health Service
The National Health Service is the shared name of three of the four publicly funded healthcare systems in the United Kingdom. They provide a comprehensive range of health services, the vast majority of which are free at the point of use to residents of the United Kingdom...
in 1948 which extended health care security to all legal residents. Most other countries national health insurance systems were implemented in the period following the Second World War as a process of deliberate healthcare reform, intended to make health care affordable to all, in the spirit of Article 25 of the Universal Declaration of Human Rights
Universal Declaration of Human Rights
The Universal Declaration of Human Rights is a declaration adopted by the United Nations General Assembly . The Declaration arose directly from the experience of the Second World War and represents the first global expression of rights to which all human beings are inherently entitled...
of 1948 by nations which had adopted the declaration as signatories. The US did not ratify the social and economic rights
International Covenant on Economic, Social and Cultural Rights
The International Covenant on Economic, Social and Cultural Rights is a multilateral treaty adopted by the United Nations General Assembly on December 16, 1966, and in force from January 3, 1976...
sections, including Article 25's right to health
Right to health
The right to health is the economic, social and cultural right to the highest attainable standard of health. It is recognised in the Universal Declaration of Human Rights and International Covenant on Economic, Social and Cultural Rights.- Definition :...
.
Types of programs
National healthcare insurance programs differ both in how the money is collected, and in how the services are provided. In countries such as Canada, payment is made by the government directly from tax revenue. In the UK an additional contribution is collected for all workers, paid by employees and employers based on the level of salary paid. In both of these cases the collection is administered by government. In France a similar system of compulsory contributions is made, but the collection is administered by non-profit organisations set up for the purpose. This is known in the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
as single-payer health care
Single-payer health care
Single-payer health care is medical care funded from a single insurance pool, run by the state. Under a single-payer system, universal health care for an entire population can be financed from a pool to which many parties employees, employers, and the state have contributed...
. The provision of services may be either through health care providers that may be publicly or privately owned.
An alternative funding approach is where countries implement national health insurance by legislation requiring compulsory contributions to competing insurance funds. These funds (which may be run by public bodies, private for-profit companies, or private non-profit companies), must provide a minimum standard of coverage and are not allowed to discriminate between patients by charging different rates according to age, occupation, or previous health status. To protect the interest of both patients and insurance companies, the government establishes an equalization pool
Equalization pool
An equalization pool a fund created to level out differences in financial risk, often across long periods of time, in a process known as risk equalization...
to spread risks between the various funds. The government may also contribute to the equalization pool as a form of health care subsidy. This is the model used in the Netherlands.
Other countries are largely funded by contributions by employers and employees to sickness funds. With these programs, funds do not come from the government, and neither from direct private payments. This system operates in countries such as Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
and Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
. Usually characterization is a matter of degree: systems are mixes of these three sources of funds (private, employer-employee contributions, and national/sub-national taxes). These funds are usually not for profit institutions run solely for the benefit of their members.
In addition to direct medical costs, some national insurance plans also provide compensation for loss of work due to ill-health, or may be part of wider social insurance
Social insurance
Social insurance is any government-sponsored program with the following four characteristics:* the benefits, eligibility requirements and other aspects of the program are defined by statute;...
plans covering things such as pensions, unemployment, occupational retraining, and financial support for students.
National schemes have the advantage that the pool or pools tend to be very very large and reflective of the national population. Health care costs, which tend to be high at certain stages in life such as during pregnancy and childbirth and especially in the last few years of life can be paid into the pool over a lifetime and be higher when earnings capacity is greatest to meet costs incurred at times when earnings capacity is low or non existent. This differs from the private insurance schemes that operate in some countries which tend to price insurance year on year according to health risks such as age, family history, previous illnesses, and height/weight ratios. Thus some people tend to have to pay more for their health insurance when they are sick and/or are least able to afford it. These factors are not taken into consideration in NHI schemes. In private schemes in competitive insurance markets, these activities by insurance companies tend to act against the basic principles of insurance which is group solidarity.
National health insurance schemes
- Health care in Ghana - National Health Insurance Scheme (NHIS)
- Health care in ColombiaHealth care in ColombiaHealth care in Colombia refers to the prevention, treatment, and management of illness and the preservation of mental and physical well being through the services offered by the medical, nursing, and allied health professions in the Republic of Colombia....
- Law 100 - National Health Insurance Scheme: Contributory Vs. Subsidized coverage (NHIS) - Health care in JapanNational Health Insurance (Japan)is one of the two major types of insurance programs available in Japan. The other is. National Health insurance is designed for people who are not eligible to be members of any employment-based health insurance program...
- People without insurance through employers can participate in a national health insurance program administered by local governments. - Health care in South Korea
- Health care in Switzerland - A compulsory health insurance covers a range of treatments which are set out in detail in the Federal Act.
- Health care in Taiwan - National Health Insurance (NHI)
- Health care in NigeriaHealth care in NigeriaHealth care provision in Nigeria is a concurrent responsibility of the three tiers of government in the country. However, because Nigeria operates a mixed economy, private providers of health care have a visible role to play in health care delivery...
- National Health Insurance Scheme (NHIS) - Health care in CanadaHealth care in CanadaHealth care in Canada is delivered through a publicly-funded health care system, which is mostly free at the point of use and has most services provided by private entities. It is guided by the provisions of the Canada Health Act. The government assures the quality of care through federal standards...
- Health care in the Philippines - Social Health Insurance Program, a resource pooling, risk sharing health care program that provides quality health care financing not only to the employed but to the sick, elderly, and indigents, as well
See also
- Health care compared - tabular comparisons of the US, Canada, and other countries not shown above.
- Health care politicsHealth care politicsHealth policy can be defined as the "decisions, plans, and actions that are undertaken to achieve specific health care goals within a society." According to the World Health Organization, an explicit health policy can achieve several things: it defines a vision for the future; it outlines...
- Publicly-funded health carePublicly-funded health carePublicly funded health care is a form of health care financing designed to meet the cost of all or most health care needs from a publicly managed fund. Usually this is under some form of democratic accountability, the right of access to which are set down in rules applying to the whole population...
- Single-payer health careSingle-payer health careSingle-payer health care is medical care funded from a single insurance pool, run by the state. Under a single-payer system, universal health care for an entire population can be financed from a pool to which many parties employees, employers, and the state have contributed...
- Universal health careUniversal health careUniversal health care is a term referring to organized health care systems built around the principle of universal coverage for all members of society, combining mechanisms for health financing and service provision.-History:...
Further reading
- Nicholas Laham: Why the United States lacks a national health insurance program, Westport, Conn. [u.a.] : Greenwood Press, 1993
- Barona, B., Plaza, B., and Hearst, N. (2001) Managed Competition for the poor or poorly managed: Lessons from the Colombian health reform experience. Oxford University Press http://heapol.oxfordjournals.org/cgi/reprint/16/suppl_2/44.pdf
- Ronald L. Numbers (ed.): Compulsory Health Insurance: The Continuing American Debate, Westport, Conn. : Greenwood Press, 1982.
- Saltman, R.B., Busse, R. and Figueras, J. (2004) Social health insurance systems in western Europe, Berkshire/New York: Open University Press/McGraw-Hill. ISBN 0-335-21363-4
- Saltman, R.B. and Dubois, H.F.W. (2004) Individual incentive schemes in social health insurance systems, 10(2): 21-25. Full text
- Van de Ven, W.P.M.M., Beck, K., Buchner, F. et al. (2003) Risk adjustment and risk selection on the sickness fund market in five European countries, Health Policy, 65(1=: 75-98.
- Saltman, R.B. and Dubois, H.F.W. (2005) Current reform proposals in social health insurance countries, Eurohealth, 11(1): 10-14. Full text
External links
- Health Care for America NOW!. An advocacy group that supports a public health insurance option for universal health care.
- Health Care Issues & Resources Barack Obama Website
- Health Debate Pros and Cons Family Doctor Magazine Website