Health insurance or medical insurance (also known as medical aid in South Africa) is a type of
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
that covers the whole or a part of the risk of a person incurring
medical expenses
Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and healthcare. Health economics is important in determining how to improv ...
. As with other types of insurance, risk is shared among many individuals. By estimating the overall risk of
health risk
A health risk assessment (also referred to as a health risk appraisal and health & well-being assessment) is a questionnaire about a person's medical history, demographic characteristics and lifestyle. It is one of the most widely used screening t ...
and
health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or
payroll tax
Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the em ...
, to provide the money to pay for the health care benefits specified in the insurance agreement.
The benefit is administered by a central organization, such as a government agency, private business, or
not-for-profit
A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
entity.
According to the
Health Insurance Association of America
AHIP (formerly America's Health Insurance Plans) is an American political advocacy and trade association of health insurance companies that offer coverage through the employer-provided, Medicare Advantage, Medicaid managed care, and individual m ...
, health insurance is defined as "coverage that provides for the payments of benefits as a result of sickness or injury. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment".
Background
A
health
Health, according to the World Health Organization, is "a state of complete physical, mental and social well-being and not merely the absence of disease and infirmity".World Health Organization. (2006)''Constitution of the World Health Organiza ...
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
policy is:
# A
contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (that is an employer or a community organization). The contract can be renewable (annually, monthly) or lifelong in the case of private insurance. It can also be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "Evidence of Coverage" booklet for private insurance, or in a national
ealth policyfor public insurance.
# (US specific) In the U.S., there are two types of health insurance - tax payer-funded and private-funded. An example of a private-funded insurance plan is an employer-sponsored self-funded
ERISA
The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax eff ...
plan. The company generally advertises that they have one of the big insurance companies. However, in an ERISA case, that insurance company "doesn't engage in the act of insurance", they just administer it. Therefore, ERISA plans are not subject to state laws. ERISA plans are governed by federal law under the jurisdiction of the US Department of Labor (USDOL). The specific benefits or coverage details are found in the Summary Plan Description (SPD). An appeal must go through the insurance company, then to the Employer's Plan Fiduciary. If still required, the Fiduciary's decision can be brought to the USDOL to review for ERISA compliance, and then file a lawsuit in federal court.
The individual insured person's obligations may take several forms:
* Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage. (US specific) According to the healthcare law, a premium is calculated using 5 specific factors regarding the insured person. These factors are age, location, tobacco use, individual vs. family enrollment, and which plan category the insured chooses. Under the Affordable Care Act, the government pays a tax credit to cover part of the premium for persons who purchase private insurance through the Insurance Marketplace.
*
Deductible
In an insurance policy, the deductible (in British English, the excess) is the amount paid
out of pocket by the policy holder before an insurance provider will pay any expenses. In general usage, the term ''deductible'' may be used to describe o ...
: The amount that the insured must pay
out-of-pocket
An out-of-pocket expense (or out-of-pocket cost, OOP) is the direct payment of money that may or may not be later reimbursed from a third-party source.
For example, when operating a vehicle, gasoline, parking fees and tolls are considered out-of ...
before the health insurer pays its share. For example, policy-holders might have to pay a $7500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. Furthermore, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible.
*
Co-payment
A copayment or copay (called a gap in Australian English) is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. It may be defined in an insurance policy and paid by an insured person ea ...
: The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $45 co-payment for a doctor's visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.
*
Coinsurance
In insurance, co-insurance or coinsurance is the splitting or spreading of risk among multiple parties.
In the United States
In the U.S. insurance market, co-insurance is the joint assumption of risk between the insurer and the insured. In title i ...
: Instead of, or in addition to, paying a fixed amount up front (a co-payment), the co-insurance is a percentage of the total cost that an insured person may also pay. For example, the member might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. If there is an upper limit on coinsurance, the policy-holder could end up owing very little, or a great deal, depending on the actual costs of the services they obtain.
* Exclusions: Not all services are covered. Billed items like use-and-throw, taxes, etc. are excluded from admissible claim. The insured are generally expected to pay the full cost of non-covered services out of their own pockets.
* Coverage limits: Some health insurance policies only pay for health care up to a certain dollar amount. The insured person may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some insurance company schemes have annual or lifetime coverage maxima. In these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs.
* Out-of-pocket maximum: Similar to coverage limits, except that in this case, the insured person's payment obligation ends when they reach the out-of-pocket maximum, and health insurance pays all further covered costs. Out-of-pocket maximum can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.
*
Capitation: An amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer.
* In-Network Provider: (U.S. term) A health care provider on a list of providers preselected by the insurer. The insurer will offer discounted coinsurance or co-payments, or additional benefits, to a plan member to see an in-network provider. Generally, providers in network are providers who have a contract with the insurer to accept rates further discounted from the "usual and customary" charges the insurer pays to out-of-network providers.
*Out-of-Network Provider: A health care provider that has not contracted with the plan. If using an out-of-network provider, the patient may have to pay full cost of the benefits and services received from that provider. Even for emergency services, out-of-network providers may bill patients for some additional costs associated.
* Prior Authorization: A certification or authorization that an insurer provides prior to medical service occurring. Obtaining an authorization means that the insurer is obligated to pay for the service, assuming it matches what was authorized. Many smaller, routine services do not require authorization.
[Prior Authorizations](_blank)
Healthharbor.com. Retrieved on 26 October 2011.
*
Formulary: the list of drugs that an insurance plan agrees to cover.
*
Explanation of Benefits: A document that may be sent by an insurer to a patient explaining what was covered for a medical service, and how payment amount and patient responsibility amount were determined.
In the case of emergency room billing, patients are notified within 30 days post service. Patients are rarely notified of the cost of emergency room services in-person due to patient conditions and other logistics until receipt of this letter.
Prescription drug plans are a form of insurance offered through some health insurance plans. In the U.S., the patient usually pays a copayment and the prescription drug insurance part or all of the balance for drugs covered in the
formulary of the plan.
Such plans are routinely part of national health insurance programs. For example, in the province of Quebec, Canada, prescription drug insurance is universally required as part of the public health insurance plan, but may be purchased and administered either through private or group plans, or through the public plan.
Some, if not most, health care providers in the United States will agree to bill the insurance company if patients are willing to sign an agreement that they will be responsible for the amount that the insurance company doesn't pay. The insurance company pays out of network providers according to "reasonable and customary" charges, which may be less than the provider's usual fee. The provider may also have a separate contract with the insurer to accept what amounts to a discounted rate or capitation to the provider's standard charges. It generally costs the patient less to use an in-network provider.
Comparisons
![Health Expenditure per capita OECD 2013](https://upload.wikimedia.org/wikipedia/commons/8/8c/Health_Expenditure_per_capita_OECD_2013.png)
The Commonwealth Fund, in its annual survey, "Mirror, Mirror on the Wall", compares the performance of the health care systems in Australia, New Zealand, the United Kingdom, Germany, Canada and the U.S. Its 2007 study found that, although the U.S. system is the most expensive, it consistently under-performs compared to the other countries. One difference between the U.S. and the other countries in the study is that the U.S. is the only country without universal health insurance coverage.
![Life Expectancy in OECD](https://upload.wikimedia.org/wikipedia/commons/c/cd/Life_Expectancy_in_OECD.svg)
The Commonwealth Fund completed its thirteenth annual health policy survey in 2010.
A study of the survey "found significant differences in access, cost burdens, and problems with health insurance that are associated with insurance design".
[Schoen C et al. (2010). How Health Insurance Design Affects Access To Care And Costs, By Income, In Eleven Countries. ''Health Affairs'']
Free full-text
Of the countries surveyed, the results indicated that people in the United States had more out-of-pocket expenses, more disputes with insurance companies than other countries, and more insurance payments denied; paperwork was also higher although Germany had similarly high levels of paperwork.
Australia
The Australian public health system is called
Medicare, which provides free universal access to hospital treatment and subsidised out-of-hospital medical treatment. It is funded by a 2% tax levy on all taxpayers, an extra 1% levy on high income earners, as well as general revenue.
The private health system is funded by a number of private health insurance organizations. The largest of these is
Medibank Private Limited, which was, until 2014, a government-owned entity, when it was
privatized
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
and listed on the
Australian Stock Exchange
Australian Securities Exchange Ltd or ASX, is an Australian public company that operates Australia's primary securities exchange, the Australian Securities Exchange (sometimes referred to outside of Australia as, or confused within Australia as, ...
.
Australian health funds can be either 'for profit' including
Bupa
Bupa , legally British United Provident Association Limited, is an international health insurance and healthcare group with over 38 million customers worldwide.
Bupa's origins and global headquarters are in the United Kingdom. Its main countrie ...
and
nib;
'mutual' including
Australian Unity
Australian Unity is an Australian mutual company having its origins in the friendly societies movement. It was formed as the Manchester Unity Independent Order of Oddfellows (MUIOOF) in Melbourne, Victoria, on 7 December 1840 by eight men inclu ...
; or
'non-profit' including
GMHBA,
HCF and the
HBF Health Insurance. Some, such as Police Health, have membership restricted to particular groups, but the majority have open membership. Membership to most health funds is now also available through comparison websites. These comparison sites operate on a commission-basis by agreement with their participating health funds. The Private Health Insurance Ombudsman also operates a free website that allows consumers to search for and compare private health insurers' products, which includes information on price and level of cover.
Most aspects of private health insurance in Australia are regulated by the ''Private Health Insurance Act 2007''. Complaints and reporting of the private health industry is carried out by an independent government agency, the
Private Health Insurance Ombudsman The Private Health Insurance Ombudsman was an Australian Government agency which acted independently of the government in investigating complaints involving private health insurance and reporting. The role and functions of the office are contained ...
. The ombudsman publishes an annual report that outlines the number and nature of complaints per health fund compared to their market share
The private health system in Australia operates on a "community rating" basis, whereby premiums do not vary solely because of a person's previous medical history, the current state of health, or (generally speaking) their age (but see Lifetime Health Cover below). Balancing this are waiting periods, in particular for pre-existing conditions (usually referred to within the industry as PEA, which stands for "pre-existing ailment"). Funds are entitled to impose a waiting period of up to 12 months on benefits for any medical condition the signs and symptoms of which existed during the six months ending on the day the person first took out insurance. They are also entitled to impose a 12-month waiting period for benefits for treatment relating to an obstetric condition, and a 2-month waiting period for all other benefits when a person first takes out private insurance. Funds have the discretion to reduce or remove such waiting periods in individual cases. They are also free not to impose them, to begin with, but this would place such a fund at risk of "adverse selection", attracting a disproportionate number of members from other funds, or from the pool of intending members who might otherwise have joined other funds. It would also attract people with existing medical conditions, who might not otherwise have taken out insurance at all because of the denial of benefits for 12 months due to the PEA Rule. The benefits paid out for these conditions would create pressure on premiums for all the fund's members, causing some to drop their membership, which would lead to further rises in premiums, and a vicious cycle of higher premiums-leaving members would ensue.
The Australian government has introduced a number of incentives to encourage adults to take out private hospital insurance. These include:
* Lifetime Health Cover: If a person has not taken out private hospital cover by 1 July after their 31st birthday, then when (and if) they do so after this time, their premiums must include a loading of 2% per annum for each year they were without hospital cover. Thus, a person taking out private cover for the first time at age 40 will pay a 20 percent loading. The loading is removed after 10 years of continuous hospital cover. The loading applies only to premiums for hospital cover, not to ancillary (extras) cover.
* Medicare Levy Surcharge: People whose taxable income is greater than a specified amount (in the 2011/12 financial year $80,000 for singles and $168,000 for couples) and who do not have an adequate level of private hospital cover must pay a 1% surcharge on top of the standard 1.5% Medicare Levy. The rationale is that if the people in this income group are forced to pay more money one way or another, most would choose to purchase hospital insurance with it, with the possibility of a benefit if they need private hospital treatment – rather than pay it in the form of extra tax as well as having to meet their own private hospital costs.
** The Australian government announced in May 2008 that it proposes to increase the thresholds, to $100,000 for singles and $150,000 for families. These changes require legislative approval. A bill to change the law has been introduced but was not passed by the Senate. An amended version was passed on 16 October 2008. There have been criticisms that the changes will cause many people to drop their private health insurance, causing a further burden on the public hospital system, and a rise in premiums for those who stay with the private system. Other commentators believe the effect will be minimal.
* Private Health Insurance Rebate: The government subsidises the premiums for all private health insurance cover, including hospital and ancillary (extras), by 10%, 20% or 30%, depending on age. The Rudd Government announced in May 2009 that as of July 2010, the Rebate would become means-tested, and offered on a sliding scale. While this move (which would have required legislation) was defeated in the Senate at the time, in early 2011 the Gillard Government announced plans to reintroduce the legislation after the Opposition loses the balance of power in the Senate. The
ALP and
Greens have long been against the rebate, referring to it as "middle-class welfare".
Canada
As per the
Constitution of Canada
The Constitution of Canada (french: Constitution du Canada) is the supreme law in Canada. It outlines Canada's system of government and the civil and human rights of those who are citizens of Canada and non-citizens in Canada. Its contents a ...
, health care is mainly a provincial government responsibility in Canada (the main exceptions being federal government responsibility for services provided to aboriginal peoples covered by treaties, the
Royal Canadian Mounted Police
The Royal Canadian Mounted Police (RCMP; french: Gendarmerie royale du Canada; french: GRC, label=none), commonly known in English as the Mounties (and colloquially in French as ) is the federal police, federal and national police service of ...
, the armed forces, and Members of Parliament). Consequently, each province administers its own health insurance program. The federal government influences health insurance by virtue of its fiscal powers – it transfers cash and tax points to the provinces to help cover the costs of the universal health insurance programs. Under the
Canada Health Act
The ''Canada Health Act'' (CHA; ''french: Loi canadienne sur la santé'') is a statute of the Parliament of Canada, adopted in 1984, which establishes the framework for federal financial contributions to the provincial and territorial health in ...
, the federal government mandates and enforces the requirement that all people have free access to what are termed "medically necessary services," defined primarily as care delivered by physicians or in hospitals, and the nursing component of long-term residential care. If provinces allow doctors or institutions to charge patients for medically necessary services, the federal government reduces its payments to the provinces by the amount of the prohibited charges. Collectively, the public provincial health insurance systems in Canada are frequently referred to as
Medicare. This public insurance is tax-funded out of general government revenues, although British Columbia and Ontario levy a mandatory premium with flat rates for individuals and families to generate additional revenues - in essence, a surtax. Private health insurance is allowed, but in six provincial governments only for services that the public health plans do not cover (for example, semi-private or private rooms in hospitals and prescription drug plans). Four provinces allow insurance for services also mandated by the Canada Health Act, but in practice, there is no market for it. All Canadians are free to use private insurance for elective medical services such as laser vision correction surgery, cosmetic surgery, and other non-basic medical procedures. Some 65% of Canadians have some form of supplementary private health insurance; many of them receive it through their employers.
Private-sector services not paid for by the government account for nearly 30 percent of total health care spending.
In 2005, the
Supreme Court of Canada
The Supreme Court of Canada (SCC; french: Cour suprême du Canada, CSC) is the Supreme court, highest court in the Court system of Canada, judicial system of Canada. It comprises List of Justices of the Supreme Court of Canada, nine justices, wh ...
ruled, in ''
Chaoulli v. Quebec ''Chaoulli v Quebec (AG)'' 0051 S.C.R. 791, ,
was a decision by the Supreme Court of Canada of which the Court ruled that the ''Quebec Health Insurance Act'' and the ''Hospital Insurance Act'' prohibiting private medical insurance in the face of lo ...
'', that the province's prohibition on private insurance for health care already insured by the provincial plan violated the Quebec Charter of Rights and Freedoms, and in particular, the sections dealing with the
right to life and
security
Security is protection from, or resilience against, potential harm (or other unwanted coercive change) caused by others, by restraining the freedom of others to act. Beneficiaries (technically referents) of security may be of persons and social ...
, if there were unacceptably long wait times for treatment, as was alleged in this case. The ruling has not changed the overall pattern of health insurance across Canada, but has spurred on attempts to tackle the core issues of supply and demand and the impact of wait times.
China
Cyprus
In 2020 in Cyprus it was introduced the
General Healthcare System (GHS, also known as GESY) which is an independent insurance fund through which clinics, private doctors, pharmacists, laboratories, microbiological laboratories, and physiotherapists will be paid so that they can offer medical care to permanent residents of Cyprus who will be paying contributions to this fund.
In addition to GESY, more than 12 local and international insurance companies (e.g.
Bupa
Bupa , legally British United Provident Association Limited, is an international health insurance and healthcare group with over 38 million customers worldwide.
Bupa's origins and global headquarters are in the United Kingdom. Its main countrie ...
, Aetna,
Cigna,
Metlife
MetLife, Inc. is the holding corporation for the Metropolitan Life Insurance Company (MLIC), better known as MetLife, and its affiliates. MetLife is among the largest global providers of insurance, annuities, and employee benefit programs, wi ...
) provide individual and group medical insurance plans. The plans are divided into two main categories plans providing coverage from inpatient expenses (i.e. hospitalization, operations) and plans covering inpatient and outpatient expenses (such as doctor visits, medications, physio-therapies).
France
The national system of health insurance was instituted in 1945, just after the end of the Second World War. It was a compromise between
Gaullist
Gaullism (french: link=no, Gaullisme) is a French political stance based on the thought and action of World War II French Resistance leader Charles de Gaulle, who would become the founding President of the Fifth French Republic. De Gaulle withd ...
and
Communist
Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a s ...
representatives in the French parliament. The Conservative Gaullists were opposed to a state-run healthcare system, while the Communists were supportive of a complete
nationalisation
Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...
of health care along a British
Beveridge model.
The resulting programme is profession-based: all people working are required to pay a portion of their income to a not-for-profit health insurance fund, which mutualises the risk of illness, and which reimburses medical expenses at varying rates. Children and spouses of insured people are eligible for benefits, as well. Each fund is free to manage its own budget, and used to reimburse medical expenses at the rate it saw fit, however following a number of reforms in recent years, the majority of funds provide the same level of reimbursement and benefits.
The government has two responsibilities in this system.
* The first government responsibility is the fixing of the rate at which medical expenses should be negotiated, and it does so in two ways: The Ministry of Health directly negotiates prices of medicine with the manufacturers, based on the average price of sale observed in neighboring countries. A board of doctors and experts decides if the medicine provides a valuable enough medical benefit to be reimbursed (note that most medicine is reimbursed, including homeopathy). In parallel, the government fixes the reimbursement rate for medical services: this means that a doctor is free to charge the fee that he wishes for a consultation or an examination, but the social security system will only reimburse it at a pre-set rate. These tariffs are set annually through negotiation with doctors' representative organisations.
* The second government responsibility is oversight of the health-insurance funds, to ensure that they are correctly managing the sums they receive, and to ensure oversight of the public hospital network.
Today, this system is more or less intact. All citizens and legal foreign residents of France are covered by one of these mandatory programs, which continue to be funded by worker participation. However, since 1945, a number of major changes have been introduced. Firstly, the different health care funds (there are five: General, Independent, Agricultural, Student, Public Servants) now all reimburse at the same rate. Secondly, since 2000, the government now provides health care to those who are not covered by a mandatory regime (those who have never worked and who are not students, meaning the very rich or the very poor). This regime, unlike the worker-financed ones, is financed via general taxation and reimburses at a higher rate than the profession-based system for those who cannot afford to make up the difference. Finally, to counter the rise in health care costs, the government has installed two plans, (in 2004 and 2006), which require insured people to declare a referring doctor in order to be fully reimbursed for specialist visits, and which installed a mandatory co-pay of €1 for a doctor visit, €0.50 for each box of medicine prescribed, and a fee of €16–18 per day for hospital stays and for expensive procedures.
An important element of the French insurance system is solidarity: the more ill a person becomes, the less the person pays. This means that for people with serious or chronic illnesses, the insurance system reimburses them 100% of expenses, and waives their co-pay charges.
Finally, for fees that the mandatory system does not cover, there is a large range of private complementary insurance plans available. The market for these programs is very competitive, and often subsidised by the employer, which means that premiums are usually modest. 85% of French people benefit from complementary private health insurance.
Germany
Germany has the world's oldest national
social health insurance
National health insurance (NHI), sometimes called statutory health insurance (SHI), is a system of health insurance that insures a national population against the costs of health care. It may be administered by the public sector, the private sect ...
system,
with origins dating back to
Otto von Bismarck
Otto, Prince of Bismarck, Count of Bismarck-Schönhausen, Duke of Lauenburg (, ; 1 April 1815 – 30 July 1898), born Otto Eduard Leopold von Bismarck, was a conservative German statesman and diplomat. From his origins in the upper class of J ...
's Sickness Insurance Law of 1883.
Beginning with 10% of blue-collar workers in 1885, mandatory insurance has expanded; in 2009, insurance was made mandatory on all citizens, with private health insurance for the self-employed or above an income threshold.
As of 2016, 85% of the population is covered by the compulsory Statutory Health Insurance (SHI) (''Gesetzliche Krankenversicherung'' or ''GKV''), with the remainder covered by
private insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
(''Private Krankenversicherung'' or ''PKV''). Germany's health care system was 77% government-funded and 23% privately funded as of 2004.
[World Health Organization Statistical Information System: Core Health Indicators](_blank)
Who.int. Retrieved on 26 October 2011. While public health insurance contributions are based on the individual's income, private health insurance contributions are based on the individual's age and health condition.
Reimbursement is on a
fee-for-service basis, but the number of physicians allowed to accept Statutory Health Insurance in a given locale is regulated by the government and professional societies.
Co-payments were introduced in the 1980s in an attempt to prevent over utilization. The average length of hospital stay in Germany has decreased in recent years from 14 days to 9 days, still considerably longer than average stays in the United States (5 to 6 days). Part of the difference is that the chief consideration for hospital reimbursement is the number of hospital days as opposed to procedures or diagnosis. Drug costs have increased substantially, rising nearly 60% from 1991 through 2005. Despite attempts to contain costs, overall health care expenditures rose to 10.7% of GDP in 2005, comparable to other western European nations, but substantially less than that spent in the U.S. (nearly 16% of GDP).
Germans are offered three kinds of social security insurance dealing with the physical status of a person and which are co-financed by employer and employee: health insurance, accident insurance, and long-term care insurance. Long-term care insurance (''Gesetzliche Pflegeversicherung'') emerged in 1994 and is mandatory.
Accident insurance
Accident insurance is a type of insurance where the policy holder is paid directly in the event of an accident resulting in injury of the insured. The insured can spend the benefit payment however they choose. Accident insurance is complementary to ...
(gesetzliche Unfallversicherung) is covered by the employer and basically covers all risks for commuting to work and at the workplace.
Greece
The National Health System in Greece covers both out and in-patient treatment.
The out-patient treatment is carried out by social administrative structures as following:
* EOPPY (National Organization for the Provision of Health Services): contracted private healthcare providers
* PEDY (National Primary Healthcare Network) units: public healthcare
* State hospitals, rural and regional medical units, health centers of the ESY (National Health System)
* Private health professionals: Medical professionals and services not contracted with EOPYY.
The in-patient treatment is carried out by:
* State hospitals of the National Health System (ESY).
* Private Clinics contracted with the National Health Carrier (EOPYY)
* Private hospitals and clinics that are not contracted with the National Health Carrier.
In Greece anyone can cover the hospitalization expenses using a private insurance policy, that can be bought by any of the local or multinational insurance companies that operate in the region (e.g. Metlife, Interamerican, Aetna, IMG).
India
In India, provision of health care services varies state-wise. Public health services are prominent in most of the states, but due to inadequate resources and management, major population opts for private health services.
To improve the awareness and better health care facilities,
Insurance Regulatory and Development Authority of India
The Insurance Regulatory and Development Authority of India (IRDAI) is a regulatory body under the jurisdiction of Ministry of Finance , Government of India and is tasked with regulating and licensing the insurance and re-insurance industrie ...
and
The General Corporation of India runs health care campaigns for the whole population. IN 2018, for under privileged citizens,
Prime Minister Narendra Modi announced the launch of a new public health insurance fund called
Ayushman Bharat Yojana and the government claims that the new system will try to reach more than 500 million people.
In India, Health insurance is offered mainly in two Types:
* Indemnity Plan basically covers the hospitalisation expenses and has subtypes like Individual Insurance, Family Floater Insurance, Senior Citizen Insurance, Maternity Insurance, Group Medical Insurance.
* Fixed Benefit Plan pays a fixed amount for pre-decided diseases like critical illness, cancer, heart disease, etc. It has also its sub types like Preventive Insurance, Critical illness and Personal Accident.
Depending on the type of insurance and the company providing health insurance, coverage includes pre-and post-hospitalisation charges, ambulance charges, day care charges, Health Checkups, etc.
It is pivotal to know about the exclusions which are not covered under insurance schemes:
*Treatment related to dental disease or surgeries
*All kind of STD's and AIDS
*Non-Allopathic Treatment
Few of the companies do provide insurance against such diseases or conditions, but that depends on the type and the insured amount.
Some important aspects to be considered before choosing the health insurance in India are Claim Settlement ratio, Insurance limits and Caps, Coverage and network hospitals.
Japan
There are three major types of insurance programs available in Japan: Employee Health Insurance (健康保険 Kenkō-Hoken), National Health Insurance (国民健康保険 Kokumin-Kenkō-Hoken), and the Late-stage Elderly Medical System (後期高齢医療制度 Kouki-Kourei-Iryouseido).
Although private health insurance is available, all Japanese citizens, permanent residents, and non-Japanese with a visa lasting one year or longer are required to be enrolled in either National Health Insurance or Employee Health Insurance. National Health Insurance is designed for those who are not eligible for any employment-based health insurance program. The Late-stage Elderly Medical System is designed for people who are age 75 and older.
National Health Insurance is organised on a household basis. Once a household has applied, the entire family is covered. Applicants receive a health insurance card, which must be used when receiving treatment at a hospital. There is a required monthly premium, but co-payments are standardized so payers are only expected to cover ten to thirty percent of the cost, depending on age. If out-of-pocket costs exceed pre-determined limits, payers may apply for a rebate from the National Health Insurance program.
Employee Health Insurance covers diseases, injuries, and death regardless of whether an incident occurred at a workplace. Employee Health Insurance covers a maximum of 180 days of medical care per year for work-related diseases or injuries and 180 days per year for other diseases or injuries. Employers and employees must contribute evenly to be covered by Employee Health Insurance.
The Late-stage Elderly Medical System began in 1983 following the Health Care for the Aged Law of 1982. It allowed many health insurance systems to offer financial assistance to elderly people. There is a medical coverage fee. To be eligible, those insured must be either: older than 70, or older than 65 with a recognized disability. The Late-stage Elderly Medical System includes preventive and standard medical care.
Issues of the healthcare system
Due to Japan's
aging population
Population ageing is an increasing median age in a population because of declining fertility rates and rising life expectancy. Most countries have rising life expectancy and an ageing population, trends that emerged first in developed countries ...
, the Late-stage Elderly Medical System represents one third of the country's total healthcare cost. When retiring employees shift from Employee Health Insurance to the Late-stage Elderly Medical System, the national cost of health insurance is expected to increase since individual healthcare costs tend to increase with age.
Netherlands
In 2006, a new system of health insurance came into force in the Netherlands. This new system avoids the two pitfalls of adverse selection and moral hazard associated with traditional forms of health insurance by using a combination of regulation and insurance
equalization pool
An equalization pool is a fund created to level out differences in financial risk, often across long periods of time, in a process known as risk equalization. Examples include mandatory health insurance and grower co-operatives.
Health insurance
I ...
. Moral hazard is avoided by mandating that insurance companies provide at least one policy that meets a government set minimum standard level of coverage, and all adult residents are obliged by law to purchase this coverage from an insurance company of their choice. All insurance companies receive funds from the equalization pool to help cover the cost of this government-mandated coverage. This pool is run by a regulator which collects salary-based contributions from employers, which make up about 50% of all health care funding, and funding from the government to cover people who cannot afford health care, which makes up an additional 5%.
The remaining 45% of health care funding comes from insurance premiums paid by the public, for which companies compete on price, though the variation between the various competing insurers is only about 5%. However, insurance companies are free to sell additional policies to provide coverage beyond the national minimum. These policies do not receive funding from the equalization pool but cover additional treatments, such as dental procedures and physiotherapy, which are not paid for by the mandatory policy.
Funding from the equalization pool is distributed to insurance companies for each person they insure under the required policy. However, high-risk individuals get more from the pool, and low-income persons and children under 18 have their insurance paid for entirely. Because of this, insurance companies no longer find insuring high-risk individuals an unappealing proposition, avoiding the potential problem of adverse selection.
Insurance companies are not allowed to have co-payments, caps, or deductibles, or deny coverage to any person applying for a policy, or charge anything other than their nationally set and published standard premiums. Therefore, every person buying insurance will pay the same price as everyone else buying the same policy, and every person will get at least the minimum level of coverage. This applies to all people permanently living and working in the Netherlands. International students that move to the Netherlands for study purposes have to take out compulsory Dutch health insurance if they decide to also work (zero-hour contracts included) or do a paid internship during their stay. In that case, they'll need to take out the compulsory basic package of Dutch health insurance. Additional insurance is optional depending on the student's personal needs.
New Zealand
Since 1974, New Zealand has had a system of universal no-fault health insurance for personal injuries through the
Accident Compensation Corporation
The Accident Compensation Corporation (ACC) ( mi, Te Kaporeihana Āwhina Hunga Whara) is the New Zealand Crown entity responsible for administering the country's no-fault accidental injury compensation scheme, commonly referred to as the ACC sch ...
(ACC). The ACC scheme covers most of the costs of related to treatment of injuries acquired in New Zealand (including overseas visitors) regardless of how the injury occurred, and also covers lost income (at 80 percent of the employee's pre-injury income) and costs related to long-term rehabilitation, such as home and vehicle modifications for those seriously injured. Funding from the scheme comes from a combination of levies on employers' payroll (for work injuries), levies on an employee's taxable income (for non-work injuries to salary earners), levies on vehicle licensing fees and petrol (for motor vehicle accidents), and funds from the general taxation pool (for non-work injuries to children, senior citizens, unemployed people, overseas visitors, etc.)
Rwanda
Rwanda is one of a handful of
low income countries
A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreeme ...
that has implemented community-based health insurance schemes in order to reduce the financial barriers that prevent poor people from seeking and receiving needed health services. This scheme has helped reach 90% of the country's population with health care coverage.
Singapore
Singaporeans have one of the longest
life expectancy at birth
Life is a quality that distinguishes matter that has biological processes, such as signaling and self-sustaining processes, from that which does not, and is defined by the capacity for growth, reaction to stimuli, metabolism, energy t ...
in the world. During this long life, encountering uncertain situations requiring hospitalization are inevitable. Health insurance or medical insurance cover high healthcare costs during hospitalization.
Health insurance for Singapore Citizens and Permanent Residents
MediShield Life, is a universal health insurance covering all Singapore Citizens and Permanent Residents. MediShield Life covers hospitalization costs for a stay in ward B2 or C in a Public hospital. For the hospitalization in a Private hospital, or in ward A or B1 in Public hospital, MediShield Life coverage is pegged to B2 or C ward prices and insured is required to pay the remaining bill amount. This remaining bill amount can be paid using
MediSave
Medisave is a national medical savings account system in Singapore, introduced in April 1984. The contribution is mandatory and taken from the monthly Central Provident Fund (CPF) contribution. The system allows Singaporeans to put aside part of ...
but limits are applied on the MediSave usage. MediShield Life does not cover overseas medical expenses and the treatment of serious pre-existing illnesses for which one has been receiving treatment during the 12 months before the start of the MediShield Life coverage. MediShield Life also does not cover treatment of congenital anomalies (medical conditions that are present at birth), cosmetic surgery, pregnancy-related charges and mental illness.
As the MediShield Life benefits are capped for B2 or C ward hospitalization in public hospitals, Integrated Shield plans provide coverage for the hospitalization in private hospitals, or ward A or B1 in public hospitals.
Integrated Shield insurance plans cover large hospitalization bills for Private hospitals or, ward A or B1.
However, insured is still required to pay a portion of the bill amount. This is in accordance with Singapore's healthcare philosophy which promotes personal responsibility with getting individuals to share the cost of healthcare. With this philosophy, deductible, co-insurance and peroration are applied on most of the Health Insurance plans in Singapore. Such health insurance plans provide an option to purchase a health insurance rider to cover these charges.
Health insurance for Foreigners in Singapore
Unlike Singapore Citizens and Permanent Residents, Foreigners are not automatically covered by the MediShield Life. Foreigners can purchase the health insurance plans from several life insurers in Singapore.
Switzerland
Healthcare in Switzerland is
universal
Universal is the adjective for universe.
Universal may also refer to:
Companies
* NBCUniversal, a media and entertainment company
** Universal Animation Studios, an American Animation studio, and a subsidiary of NBCUniversal
** Universal TV, a ...
and is regulated by the Swiss Federal Law on Health Insurance. Health insurance is compulsory for all persons residing in
Switzerland
). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
(within three months of taking up residence or being born in the country).
It is therefore the same throughout the country and avoids double standards in healthcare. Insurers are required to offer this basic insurance to everyone, regardless of age or medical condition. They are not allowed to make a profit off this basic insurance, but can on supplemental plans.
The universal compulsory coverage provides for treatment in case of illness or accident and pregnancy. Health insurance covers the costs of medical treatment, medication and hospitalization of the insured. However, the insured person pays part of the costs up to a maximum, which can vary based on the individually chosen plan, premiums are then adjusted accordingly. The whole healthcare system is geared towards to the general goals of enhancing general public health and reducing costs while encouraging individual responsibility.
The Swiss healthcare system is a combination of public, subsidized private and totally private systems. Insurance premiums vary from insurance company to company, the excess level individually chosen (''franchise''), the place of residence of the insured person and the degree of supplementary benefit coverage chosen (complementary medicine, routine dental care, semi-private or private ward hospitalization, etc.).
The insured person has full freedom of choice among the approximately 60 recognized healthcare providers competent to treat their condition (in their region) on the understanding that the costs are covered by the insurance up to the level of the official tariff. There is freedom of choice when selecting an insurance company to which one pays a premium, usually on a monthly basis. The insured person pays the insurance premium for the basic plan up to 8% of their personal income. If a premium is higher than this, the government gives the insured person a cash subsidy to pay for any additional premium.
The compulsory insurance can be supplemented by private "complementary" insurance policies that allow for coverage of some of the treatment categories not covered by the basic insurance or to improve the standard of room and service in case of hospitalization. This can include complementary medicine, routine dental treatment and private ward hospitalization, which are not covered by the compulsory insurance.
As far as the compulsory health insurance is concerned, the insurance companies cannot set any conditions relating to age, sex or state of health for coverage. Although the level of premium can vary from one company to another, they must be identical within the same company for all insured persons of the same age group and region, regardless of sex or state of health. This does not apply to complementary insurance, where premiums are risk-based.
Switzerland has an
infant mortality rate
Infant mortality is the death of young children under the age of 1. This death toll is measured by the infant mortality rate (IMR), which is the probability of deaths of children under one year of age per 1000 live births. The under-five morta ...
of about 3.6 out of 1,000. The general
life expectancy
Life expectancy is a statistical measure of the average time an organism is expected to live, based on the year of its birth, current age, and other demographic factors like sex. The most commonly used measure is life expectancy at birth ...
in 2012 was for men 80.5 years compared to 84.7 years for women.
These are the world's best figures.
United Kingdom
The
UK's National Health Service (NHS) is a
publicly funded healthcare
Publicly funded healthcare is a form of health care financing designed to meet the cost of all or most healthcare needs from a publicly managed fund. Usually this is under some form of democratic accountability, the right of access to which are ...
system that provides coverage to everyone normally resident in the UK. It is not strictly an insurance system because (a) there are no premiums collected, (b) costs are not charged at the patient level and (c) costs are not pre-paid from a pool. However, it does achieve the main aim of insurance which is to spread financial risk arising from ill-health. The costs of running the NHS (est. £104 billion in 2007–8) are met directly from general taxation. The NHS provides the majority of health care in the UK, including
primary care
Primary care is the day-to-day healthcare given by a health care provider. Typically this provider acts as the first contact and principal point of continuing care for patients within a healthcare system, and coordinates other specialist care t ...
,
in-patient care,
long-term health care,
ophthalmology
Ophthalmology ( ) is a surgical subspecialty within medicine that deals with the diagnosis and treatment of eye disorders.
An ophthalmologist is a physician who undergoes subspecialty training in medical and surgical eye care. Following a medic ...
, and
dentistry
Dentistry, also known as dental medicine and oral medicine, is the branch of medicine focused on the teeth, gums, and mouth. It consists of the study, diagnosis, prevention, management, and treatment of diseases, disorders, and conditions o ...
.
Private health care has continued parallel to the NHS, paid for largely by private insurance, but it is used by less than 8% of the population, and generally as a top-up to NHS services.
There are many treatments that the private sector does not provide. For example, health insurance on
pregnancy
Pregnancy is the time during which one or more offspring develops ( gestates) inside a woman's uterus (womb). A multiple pregnancy involves more than one offspring, such as with twins.
Pregnancy usually occurs by sexual intercourse, but ca ...
is generally not covered or covered with restricting clauses. Typical exclusions for
Bupa
Bupa , legally British United Provident Association Limited, is an international health insurance and healthcare group with over 38 million customers worldwide.
Bupa's origins and global headquarters are in the United Kingdom. Its main countrie ...
schemes (and many other insurers) include:
aging, menopause and puberty; AIDS/HIV; allergies or allergic disorders; birth control, conception, sexual problems and sex changes; chronic conditions; complications from excluded or restricted conditions/ treatment; convalescence, rehabilitation and general nursing care ; cosmetic, reconstructive or weight loss treatment; deafness; dental/oral treatment (such as fillings, gum disease, jaw shrinkage, etc.); dialysis; drugs and dressings for out-patient or take-home use† ; experimental drugs and treatment; eyesight; HRT and bone densitometry; learning difficulties, behavioural and developmental problems; overseas treatment and repatriation; physical aids and devices; pre-existing or special conditions; pregnancy and childbirth; screening and preventive treatment; sleep problems and disorders; speech disorders; temporary relief of symptoms.
(† = except in exceptional circumstances)
There are a number of other companies in the United Kingdom which include, among others,
Chubb Limited
Chubb Limited is an American company incorporated in Zürich, Switzerland. It is the parent company of Chubb, a global provider of insurance products covering property and casualty, accident and health, reinsurance, and life insurance and the la ...
,
AXA
Axa S.A. (styled as ''AXA'' or GIG in the Middle East) is a French multinational insurance company. The head office is in the 8th arrondissement of Paris, France. It also provides investment management and other financial services.
The Ax ...
,
Aviva,
Bupa
Bupa , legally British United Provident Association Limited, is an international health insurance and healthcare group with over 38 million customers worldwide.
Bupa's origins and global headquarters are in the United Kingdom. Its main countrie ...
,
Groupama Healthcare
Groupama an abbreviation for Groupe des Assurances Mutuelles Agricoles ( en , Group of Mutual Agricultural Insurances) is a French insurance group headquartered in Paris with operations in 10 countries.
It is listed in the 2007 ICA Global 300 ...
,
WPA
WPA may refer to:
Computing
*Wi-Fi Protected Access, a wireless encryption standard
*Windows Product Activation, in Microsoft software licensing
* Wireless Public Alerting (Alert Ready), emergency alerts over LTE in Canada
* Windows Performance An ...
and
VitalityHealth
VitalityHealth is a United Kingdom-based company specialising in private medical insurance sold to the UK market. The company is a subsidiary of Discovery Limited and alongside VitalityLife and Vitality Corporate Services it forms Discovery Li ...
. Similar exclusions apply, depending on the policy which is purchased.
In 2009, the main representative body of British Medical physicians, the British Medical Association, adopted a policy statement expressing concerns about developments in the health insurance market in the UK. In its Annual Representative Meeting which had been agreed earlier by the Consultants Policy Group (i.e. Senior physicians)
stating that the BMA was "extremely concerned that the policies of some private healthcare insurance companies are preventing or restricting patients exercising choice about (i) the consultants who treat them; (ii) the hospital at which they are treated; (iii) making top up payments to cover any gap between the funding provided by their insurance company and the cost of their chosen private treatment." It went in to "call on the BMA to publicise these concerns so that patients are fully informed when making choices about private healthcare insurance." The practice of insurance companies deciding which consultant a patient may see as opposed to GPs or patients is referred to as
Open Referral Open Referral in private medical insurance refers to the practice of General Practitioner referring patients to any consultant with a particular speciality for treatment rather than explicitly naming a specific consultant. The insurance company wil ...
. The NHS offers patients a choice of hospitals and consultants and does not charge for its services.
The private sector has been used to increase NHS capacity despite a large proportion of the British public opposing such involvement.
According to the
World Health Organization
The World Health Organization (WHO) is a specialized agency of the United Nations responsible for international public health. The WHO Constitution states its main objective as "the attainment by all peoples of the highest possible level of h ...
, government funding covered 86% of overall health care expenditures in the UK as of 2004, with private expenditures covering the remaining 14%.
Nearly one in three patients receiving NHS hospital treatment is privately insured and could have the cost paid for by their insurer. Some private schemes provide cash payments to patients who opt for NHS treatment, to deter use of private facilities. A report, by private health analysts Laing and Buisson, in November 2012, estimated that more than 250,000 operations were performed on patients with private medical insurance each year at a cost of £359 million. In addition, £609 million was spent on emergency medical or surgical treatment. Private medical insurance does not normally cover emergency treatment but subsequent recovery could be paid for if the patient were moved into a private patient unit.
United States
Short Term Health Insurance
On the 1st of August, 2018 the
DHHS issued a final rule which made federal changes to
Short-Term, Limited-Duration Health Insurance (STLDI) which lengthened the maximum contract term to 364 days and renewal for up to 36 months. This new rule, in combination with the expiration of the penalty for the
Individual Mandate
An individual mandate is a requirement by law for certain persons to purchase or otherwise obtain a good or service.
United States Militia act
The Militia Acts of 1792, based on the Constitution's militia clause (in addition to its affirmative ...
of the
Affordable Care Act
The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act and colloquially known as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Presid ...
, has been the subject of independent analysis.
The United States health care system relies heavily on private health insurance, which is the primary source of coverage for most Americans. As of 2018, 68.9% of American adults had private health insurance, according to
The Center for Disease Control and Prevention. The
Agency for Healthcare Research and Quality
The Agency for Healthcare Research and Quality (AHRQ; pronounced "ark" by initiates and often "A-H-R-Q" by the public) is one of twelve agencies within the United States Department of Health and Human Services (HHS). The agency is headquartered i ...
(AHRQ) found that in 2011, private insurance was billed for 12.2 million U.S. inpatient hospital stays and incurred approximately $112.5 billion in aggregate inpatient hospital costs (29% of the total national aggregate costs).
[Torio CM, Andrews RM. National Inpatient Hospital Costs: The Most Expensive Conditions by Payer, 2011. HCUP Statistical Brief #160. Agency for Healthcare Research and Quality, Rockville, MD. August 2013]
Public programs provide the primary source of coverage for most senior citizens and for low-income children and families who meet certain eligibility requirements. The primary public programs are
Medicare (United States), Medicare, a federal
social insurance
Social insurance is a form of Social protection, social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of Welfare, soci ...
program for seniors and certain disabled individuals; and
Medicaid
Medicaid in the United States is a federal and state program that helps with healthcare costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and pers ...
, funded jointly by the federal government and states but administered at the state level, which covers certain very low income children and their families. Together, Medicare and Medicaid accounted for approximately 63 percent of the national inpatient hospital costs in 2011.
SCHIP is a federal-state partnership that serves certain children and families who do not qualify for Medicaid but who cannot afford private coverage. Other public programs include military health benefits provided through
TRICARE
Tricare (styled TRICARE) is a health care program of the United States Department of Defense Military Health System. Tricare provides civilian health benefits for U.S Armed Forces military personnel, military retirees, and their dependents, in ...
and the
Veterans Health Administration
The Veterans Health Administration (VHA) is the component of the United States Department of Veterans Affairs (VA) led by the Under Secretary of Veterans Affairs for Health that implements the healthcare program of the VA through a national ...
and benefits provided through the
Indian Health Service
The Indian Health Service (IHS) is an operating division (OPDIV) within the U.S. Department of Health and Human Services (HHS). IHS is responsible for providing direct medical and public health services to members of federally-recognized Nativ ...
. Some states have additional programs for low-income individuals.
In the late 1990s and early 2000s,
health advocacy
Health advocacy or health activism encompasses direct service to the individual or family as well as activities that promote health and access to health care in communities and the larger public. Advocates support and promote the rights of the pa ...
companies began to appear to help patients deal with the complexities of the healthcare system. The complexity of the healthcare system has resulted in a variety of problems for the American public. A study found that 62 percent of persons declaring bankruptcy in 2007 had unpaid medical expenses of $1000 or more, and in 92% of these cases the
medical debt
Medical debt refers to debt incurred by individuals due to health care costs and related expenses.
Medical debt is different from other forms of debt, because it is usually incurred accidentally or faultlessly. People do not plan to fall ill or ...
s exceeded $5000. Nearly 80 percent who filed for bankruptcy had health insurance. The Medicare and Medicaid programs were estimated to soon account for 50 percent of all national health spending. These factors and many others fueled interest in an overhaul of the health care system in the United States. In 2010 President Obama signed into law the
Patient Protection and Affordable Care Act
The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act and colloquially known as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Presi ...
. This Act includes an 'individual mandate' that every American must have medical insurance (or pay a fine). Health policy experts such as
David Cutler
David Matthew Cutler (born June 22, 1965) is the Otto Eckstein Professor of Applied Economics at Harvard University. He was given a five-year term appointment of Harvard College Professor, which recognizes excellence in undergraduate teaching. H ...
and
Jonathan Gruber, as well as the American medical insurance lobby group
America's Health Insurance Plans
AHIP (formerly America's Health Insurance Plans) is an American political advocacy and trade association of health insurance companies that offer coverage through the employer-provided, Medicare Advantage, Medicaid managed care, and individual ...
, argued this provision was required in order to provide "guaranteed issue" and a "community rating," which address unpopular features of America's health insurance system such as premium weightings, exclusions for pre-existing conditions, and the pre-screening of insurance applicants. During 26–28 March, the Supreme Court heard arguments regarding the validity of the Act. The Patient Protection and Affordable Care Act was determined to be constitutional on 28 June 2012. The Supreme Court determined that Congress had the authority to apply the individual mandate within its taxing powers.
History and evolution
In the late 19th century, "accident insurance" began to be available, which operated much like modern disability insurance. This payment model continued until the start of the 20th century in some jurisdictions (like California), where all laws regulating health insurance actually referred to disability insurance.
Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents. Sixty organizations were offering accident insurance in the U.S. by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in the U.S. effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911.
[Fundamentals of Health Insurance: Part A, Health Insurance Association of America, 1997, .]
Before the development of medical expense insurance, patients were expected to pay health care costs
out of their own pockets, under what is known as the
fee-for-service business model. During the middle-to-late 20th century, traditional disability insurance evolved into modern health insurance programs. One major obstacle to this development was that early forms of comprehensive health insurance were enjoined by courts for violating the traditional ban on corporate practice of the
profession
A profession is a field of work that has been successfully ''professionalized''. It can be defined as a disciplined group of individuals, '' professionals'', who adhere to ethical standards and who hold themselves out as, and are accepted by ...
s by for-profit corporations. State legislatures had to intervene and expressly legalize health insurance as an exception to that traditional rule. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and emergency health care procedures. They also cover or partially cover the cost of certain prescription and
over-the-counter drug
Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs
A prescription drug (also prescription medication or prescripti ...
s. Insurance companies determine what drugs are covered based on price, availability, and therapeutic equivalents. The list of drugs that an insurance program agrees to cover is called a
formulary.
Additionally, some prescriptions drugs may require a
prior authorization Prior authorization is a utilization management process used by some health insurance companies in the United States to determine if they will cover a prescribed procedure, service, or medication. The process is intended to act as a safety and cost- ...
before an insurance program agrees to cover its cost.
![U](https://upload.wikimedia.org/wikipedia/commons/4/4d/U.S._Uninsured_and_Uninsured_Rate_%281987_to_2008%29.JPG)
Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began offering services to individuals on a pre-paid basis, eventually leading to the development of
Blue Cross organizations.
The predecessors of today's
Health Maintenance Organization
In the United States, a health maintenance organization (HMO) is a medical insurance group that provides health services for a fixed annual fee. It is an organization that provides or arranges managed care for health insurance, self-funded healt ...
s (HMOs) originated beginning in 1929, through the 1930s and on during
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
.
The
Employee Retirement Income Security Act
The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax eff ...
of 1974 (ERISA) regulated the operation of a health benefit plan if an employer chooses to establish one, which is not required. The
Consolidated Omnibus Budget Reconciliation Act
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is a law passed by the U.S. Congress on a reconciliation basis and signed by President Ronald Reagan that, among other things, mandates an insurance program which gives some em ...
of 1985 (COBRA) gives an ex-employee the right to continue coverage under an employer-sponsored group health benefit plan.
Through the 1990s,
managed care
The term managed care or managed healthcare is used in the United States to describe a group of activities intended to reduce the cost of providing health care and providing American health insurance while improving the quality of that care ("man ...
insurance schemes including
health maintenance organizations (HMO),
preferred provider organization
In U.S. health insurance, a preferred provider organization (PPO), sometimes referred to as a participating provider organization or preferred provider option, is a managed care organization of medical doctors, hospitals, and other health ca ...
s, or
point of service plan
A point of service plan is a type of managed care health insurance plan in the United States. It combines characteristics of the health maintenance organization (HMO) and the preferred provider organization (PPO).
The POS is based on a managed c ...
s grew from about 25% US employees with employer-sponsored coverage to the vast majority. With managed care, insurers use various techniques to address costs and improve quality, including negotiation of prices ("in-network" providers),
utilization management
Utilization management (UM) or utilization review is the use of managed care techniques such as prior authorization that allow payers, particularly health insurance companies, to manage the cost of health care benefits by assessing its appropriaten ...
, and requirements for quality assurance such as being accredited by accreditation schemes such as the
Joint Commission
The Joint Commission is a United States-based nonprofit tax-exempt 501(c) organization that accredits more than 22,000 US health care organizations and programs. The international branch accredits medical services from around the world. A majori ...
and the American Accreditation Healthcare Commission.
Employers and employees may have some choice in the details of plans, including
health savings account
A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal inco ...
s,
deductible
In an insurance policy, the deductible (in British English, the excess) is the amount paid
out of pocket by the policy holder before an insurance provider will pay any expenses. In general usage, the term ''deductible'' may be used to describe o ...
, and
coinsurance
In insurance, co-insurance or coinsurance is the splitting or spreading of risk among multiple parties.
In the United States
In the U.S. insurance market, co-insurance is the joint assumption of risk between the insurer and the insured. In title i ...
. As of 2015, a trend has emerged for employers to offer
high-deductible plans, called consumer-driven healthcare plans which place more costs on employees, while employees benefit by paying lower monthly premiums. Additionally, having a high-deductible plan allows employees to open a health savings account, which allows them to contribute pre-tax savings towards future medical needs. Some employers will offer multiple plans to their employees.
Russia
The private health insurance market, known in Russian as "voluntary health insurance" (russian: добровольное медицинское страхование, ДМС) to distinguish it from state-sponsored
Mandatory Medical Insurance
200px, Insurance policy of the Medical Insurance Fund
Federal Compulsory Medical Insurance Fund (FFOMS) (russian: Федеральный фонд обязательного медицинского страхования (ФФОМС)) is one of t ...
, has experienced sustained levels of growth.
It was introduced in October 1992.
Taiwan
See also
*
ANSI 834 Enrollment Implementation Format The ANSI 834 EDI Enrollment Implementation Format is a standard file format in the United States for electronically exchanging health plan enrollment data between employers and health insurance carriers.
The Health Insurance Portability and Acc ...
*
Economic capital
In finance, mainly for financial services firms, economic capital (ecap) is the amount of risk capital, assessed on a realistic basis, which a firm requires to cover the risks that it is running or collecting as a going concern, such as market r ...
*
Health administration
Health administration, healthcare administration, healthcare management or hospital management is the field relating to leadership, management, and administration of public health systems, health care systems, hospitals, and hospital networks ...
*
Health Advocate
Health Advocate, Inc. is a US national health advocacy, patient advocacy and assistance company. The privately held company was founded in 2001 by former Aetna executives and is headquartered in Plymouth Meeting, Pennsylvania, currently run by ...
(a US-based patient advocacy company)
*
Health system – cross-national comparisons
*
Health care reform
Health care reform is for the most part governmental policy that affects health care delivery in a given place. Health care reform typically attempts to:
* Broaden the population that receives health care coverage through either public sector insur ...
*
Health crisis A health crisis or public health crisis is a difficult situation or complex health system that affects humans in one or more geographic areas (mainly occurred in natural hazards), from a particular locality to encompass the entire planet. Health cri ...
*
Health economics
Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and healthcare. Health economics is important in determining how to improv ...
*
Health insurance marketplace
In the United States, health insurance marketplaces, also called health exchanges, are organizations in each state through which people can purchase health insurance. People can purchase health insurance that complies with the Patient Protectio ...
*
Health insurance mandate
A health insurance mandate is either an employer or individual mandate to obtain private health insurance instead of (or in addition to) a national health insurance plan.D. Andrew Austin, Thomas L. Hungerford (2010). Market Structure of the ...
*
Hospital accreditation
*
International healthcare accreditation
Due to the near-universal desire for safe and good quality healthcare, there is a growing interest in international healthcare accreditation. Providing healthcare, especially of an adequate standard, is a complex and challenging process. Healthcar ...
*
Nyman's model
Nyman's model was developed by John A. Nyman beginning in 1999 and presents an alternative view of moral hazard in the context of private health insurance in the United States. Nyman is a professor of Economics at the University of Minnesota
...
*
Philosophy of healthcare
The philosophy of healthcare is the study of the ethics, processes, and people which constitute the maintenance of health for human beings. (Although veterinary concerns are worthy to note, the body of thought regarding their methodologies and pr ...
*
Prescription analytics Prescription analytics is the practice of analyzing consumers' prescription drug histories in order to provide useful information for health insurers.
In the United States, two-thirds of health insurers use prescription history reports to help id ...
*
ProtectSeniors.Org
The Association of BellTel Retirees, Inc. advocates for more than 205,000 Bell Atlantic, NYNEX, GTE, MCI, Idearc Media, Idearc/SuperMedia, and Verizon union and management retirees. The association also represents active Verizon employees regardin ...
(a US lobbying group)
*
Public health
Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals". Analyzing the det ...
*
Quality-adjusted life year
The quality-adjusted life year (QALY) is a generic measure of disease burden, including both the quality and the quantity of life lived. It is used in economic evaluation to assess the value of medical interventions. One QALY equates to one year i ...
*
Self-funded health care Self-funded health care, also known as Administrative Services Only (ASO), is a self insurance arrangement in the United States whereby an employer provides health or disability benefits to employees using the company's own funds.About.com > What ...
*
Single-payer healthcare
Single-payer healthcare is a type of universal healthcare in which the costs of essential healthcare for all residents are covered by a single public system (hence "single-payer").
Single-payer systems may contract for healthcare services from ...
*
Social security
Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
*
Welfare
Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
*
The Hospital Uninsured Patient Discount Act (Illinois)
The Hospital Uninsured Patient Discount Act () is an Illinois law that requires hospitals in Illinois to give most uninsured patients a discount on their medical bills. The act took effect on April 1, 2009.
It is the patient's responsibility ...
*
Universal Declaration of Human Rights
The Universal Declaration of Human Rights (UDHR) is an international document adopted by the United Nations General Assembly that enshrines the Human rights, rights and freedoms of all human beings. Drafted by a UN Drafting of the Universal De ...
References
External links
*
{{Authority control
Insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
Types of insurance