Countries across the world are looking for ways to provide better access to health care for its residents. In America, the Obama Administration attempted to alleviate this problem by introducing the Affordable Care Act (ACA), which would require every citizen to obtain and maintain health insurance or otherwise face tax penalties that rise each year. To accomplish this, the law included tax incentives and changes to coverage options to make coverage affordable for all Americans. It also opened up the door to more affordable health plan options inside of what’s known as the federal marketplace and, in some states, expanded eligibility for Medicaid.
However, in other countries, health care is managed a bit differently. Canada, South Africa and South Korea are some of the countries that have adopted the National Health Insurance model, also known as Statutory Health Insurance.
National Health Insurance is a legally enforced program that helps to insure the entire population of a nation against health care costs. There are various ways this is funded, such as through the private sector, public sector or a combination of the two. The country and the program varies to determine how the mechanisms are funded.
This isn’t to be confused with a government-financed or government-run health care system (such as Medicare in the US), however it is normally established through national legislation. In areas like the UK and Australia, contributions for Medicare and the National Health Service comes from general taxation, so it’s not an optional expense. In other countries, people have a choice of where their contributions go. There are numerous insurance funds to choose from with varying rates and each individual can choose which insurance fund their money goes into.
Available Programs via NHI
There are different types of programs you’ll find in national health care insurance schemes. Each one determines how funds are collected and how its services are provided. Again, in Canada, funds are automatically collected as part of general tax. Payment is made by the government from the taxes collected.
In France, things are run similarly, but rather than the government paying for the health care, it’s non-profit organizations that are specifically designed for this purpose. In the U.S., this is called single-payer health care which, while discussed as a potential solution for rising healthcare costs in the 2008 election, the ultimate ACA legislation did not select this model. The health care services provided are either performed by public or private owned physicians.
There’s another type of NHI program in certain countries, where the NHI programs are required by legislation for compulsory contributions to be made to competing insurance funds. The funds can be run by varying companies, including private for-profit organizations, public bodies or private non-profit organizations. Each of them have to provide minimum standard coverage and have to accept patients without discrimination. This means they can’t charge higher rates for the elderly or sickly, or based on a person’s occupation or medical history. The design of this program is to protect both the insurance providers and patients. This is done using an equalization pool, which helps to spread the risks between the different funds. It’s also common for the government to make contributions to the equalization pool. The Netherlands and other countries use this health care model.
Many other countries receive majority of their contributions from employers and employees, which are distributed to sickness funds. Payments don’t come from the government nor direct private payments. Instead, they come from not for profit institutions that are specifically designed to benefit its members. You can find this type of system in countries like Belgium and Germany. There is a mix of sources of funds found in this system, which includes private, national/sub-national taxes and employer-employee contributions.
In other areas, you will find national insurance plans that offer compensation for individuals that have lost work after becoming ill. Some are involved in a larger social insurance plan that covers unemployment, pensions, student financial support and employment training.
Why National Health Insurance is Adopted
There are multiple reasons why national health insurance plans are adopted in countries, especially those that are poverty-stricken or in dire need of a health reform. These schemes offer an advantage to countries because it provides an enormous pool of resources and is based on the national population. The medical expenses for pregnancy, childbirth and old age can be quite expensive, but in this model, the contributions made to the pool over a lifetime helps drive these costs down. Contributions are made by individuals when they are at their peak age and can work and afford contributions. Then once their earning capacity is low or non-existent, the funds contributed kick in.
This is different than private health insurance schemes, which can be found in many countries around the world. These institutions price rates year on year based on an individual’s health risks. This includes the person’s age, medical history, family history, current illnesses and height/weight ratios. Ultimately, this leads to patients having to pay higher health insurance premiums when they are old and sick – when they can’t really afford it.
An Example of National Health Insurance
In Nigeria, the NHI scheme is primarily funded by its members, which is based on their income. In the Formal Sector Social Health Insurance Program, the premium costs 15 percent of the person’s basic salary. The employers contribute 10 percent and the employees pay five percent. This will cover the employee, their spouse and up to four children. Additional supplementary coverage can be obtained by the employer via an HMO plan. Extra contributions are required in this case.
The contributions for this scheme have to be made on a monthly basis and is based on the benefits package chosen and a variety of other factors. Membership premiums don’t have to be paid for by the poor, elderly, disabled or veterans.
Health insurance is available through the NHI scheme or private insurers. About three percent of the population is enrolled in the available three NHI programs. Others are enrolled in a plan through their employer. Benefits included in NHI schemes include:
- Outpatient care
- Maternity care
- Prescription drugs and diagnostic tests
- Eye exams and care
- Preventive dental care and pain relief
- Consultations with specialists
- Hospital inpatient care
- A variety of prostheses