National Health Insurance - Types of Programs

Types of Programs

See also: Health care systems, Single-payer health care, and Universal health care

National healthcare insurance programs differ both in how the money is collected, and in how the services are provided. In countries such as Canada, payment is made by the government directly from tax revenue. The collection is administered by government. In France a similar system of compulsory contributions is made, but the collection is administered by non-profit organisations set up for the purpose. This is known in the United States as single-payer health care. The provision of services may be either through health care providers that may be publicly or privately owned.

An alternative funding approach is where countries implement national health insurance by legislation requiring compulsory contributions to competing insurance funds. These funds (which may be run by public bodies, private for-profit companies, or private non-profit companies), must provide a minimum standard of coverage and are not allowed to discriminate between patients by charging different rates according to age, occupation, or previous health status. To protect the interest of both patients and insurance companies, the government establishes an equalization pool to spread risks between the various funds. The government may also contribute to the equalization pool as a form of health care subsidy. This is the model used in the Netherlands.

Other countries are largely funded by contributions by employers and employees to sickness funds. With these programs, funds do not come from the government, and neither from direct private payments. This system operates in countries such as Germany and Belgium. Usually characterization is a matter of degree: systems are mixes of these three sources of funds (private, employer-employee contributions, and national/sub-national taxes). These funds are usually not for profit institutions run solely for the benefit of their members.

In addition to direct medical costs, some national insurance plans also provide compensation for loss of work due to ill-health, or may be part of wider social insurance plans covering things such as pensions, unemployment, occupational retraining, and financial support for students. National schemes have the advantage that the pool or pools tend to be very very large and reflective of the national population. Health care costs, which tend to be high at certain stages in life such as during pregnancy and childbirth and especially in the last few years of life can be paid into the pool over a lifetime and be higher when earnings capacity is greatest to meet costs incurred at times when earnings capacity is low or non existent. This differs from the private insurance schemes that operate in some countries which tend to price insurance year on year according to health risks such as age, family history, previous illnesses, and height/weight ratios. Thus some people tend to have to pay more for their health insurance when they are sick and/or are least able to afford it. These factors are not taken into consideration in NHI schemes. In private schemes in competitive insurance markets, these activities by insurance companies tend to act against the basic principles of insurance which is group solidarity.