Nowadays, with the widespread of diseases such as HIV and cancer as well as the outbreak of epidemics and pandemics like swine flu, avian flu and Severe Acute Respiratory Syndrome (also known as SARS), health cover has become a burning issue throughout the world. However, each country has its own healthcare system; therefore, health cover and health insurance differ immensely from one country to another.
In the UK, it is the National Health Service (NHS) that was founded in 1948 runs the healthcare system. It is a publicly funded healthcare service that provides health cover to everyone normally residing in the United Kingdom. However, the NHS is not a health insurance system because, no premiums are collected, costs of treatment are not charged at patient level and costs are not pre-paid from a pool. Nevertheless, the NHS still covers 86% of all health expenditures. Private health insurance providers cover the remaining 14% of all health expenses. What’s more, despite, most healthcare expenses being covered by the NHS, it is not uncomon for people to opt for complementary private health cover.
In the USA, the healthcare system heavilly relies on private medical insurance. 58% of all Americans subscribe to a form of private health cover. However, there is are also public health insurance programs which provide health cover to all senior citizens and certain disabled individuals (Medicaid). Despite this, medical cover in the USA is very expensive and it is not uncommon for excessive health bills to be the source of financial problems, with 62% of all bankruptcies filled in 2007 being linked to medical expenses.
In the Netherlands, the healthcare system (het ziekenfonds) is very different to what it is in the UK and the US. Both the state and the country’s residents finance the healthcare system. This system has been established in order to avoid both moral hazard and adverse selection. Moral hazard is avoided by stipulating that health insurance companies must provide at least one policy that meets the minimum government set minimum level of health cover. All adult residents are under the obligation to purchase this type of health insurance. This type of medical cover is funded by a pool that works on the principal of equalization. A regulator collects salary-based contributions and then redistributes to each healthcare provider. Equalization funds 50% of the healthcare system with the government contributing an extra 5% and the remaining 45% being financed by individual premiums. High-risk individuals will receive more from the pool in order to make attractive for insurance companies to cover; and consequently contributing to avoid any kind of adverse selection.
In France, the National Health System (Sécurité Sociale) was established in 1945. It was the result of a compromise that was reached between the conservative Gaullist MPs (the members of the party created by the General De Gaulle) who were against the idea of a state-run healthcare system and the Communist MPs who were in favour of a complete nationalisation of the healthcare system along the model created by Lord Beveridge. This compromise consisted in a profession-based model. All people working are required to pay a portion of their income to a not-for-porfit health insurance fund that mutualises the risk of illness. These funds reimburse medical expenses at varying rates fixed by the government (some types of treatment such as a scale and polish carried out by a dentist are not covered). The other responsabilities fulfilled by the government in this system are to oversee the health insurance funds and since 2000, the government is also responsible for financing health cover for those who are not insured under the manadatory regime (these include people who have never worked and who are not students). It is also interesting to note that children and partners of those insured are also elligible for benefits.
by Danny Atherton