Universal Healthcare Coverage What it is How it Works Types

Universal Healthcare Coverage: What it is, How it Works, Types

What Is Universal Healthcare Coverage?

Universal healthcare coverage refers to systems in which all residents have health insurance. An early example is Germany in the 1880s when Chancellor Otto von Bismarck introduced bills guaranteeing access to healthcare. Today, most industrialized nations provide universal healthcare coverage for their citizens.

Although the U.S. leads in healthcare spending, it has worse health outcomes and serves a smaller percentage of the population. Now, the healthcare system is struggling under the double burden of the global pandemic and the loss of income from elective surgery and routine medical care that was suspended during the crisis.

One answer to this crisis, according to New York City Mayor Bill De Blasio, the World Health Organization, and Pope Francis, is to provide Americans with universal healthcare coverage.

Key Takeaways

– Many countries have achieved nearly 100% universal healthcare coverage, meaning all citizens have access to medical and hospital care.

– Some countries require everyone to purchase private health insurance or face fines or tax penalties.

– In single payer systems, the government insures everyone, but medical care is in private hands.

– In socialized systems, the government provides insurance and medical care.

Understanding Universal Healthcare Coverage

There are at least three types of systems that can potentially ensure everyone is covered for medical and hospital care. These include requiring or mandating health insurance, providing insurance via a single government payer, and socialized medicine, in which both insurance and medical care are managed by the government.

Types of Universal Healthcare Coverage

Required health insurance

Some governments mandate that all residents buy health insurance or face fines or penalties. The government may subsidize part of the premiums, but most insurance is provided by private companies. Germany’s system, for example, includes both for-profit and not-for-profit insurers. Requiring health insurance has helped some countries achieve universal coverage.

In the U.S., the 2010 Affordable Care Act established a similar requirement and system. The law levied a tax penalty on people who did not purchase health insurance. The Tax Cuts and Jobs Act (TCJA) repealed the penalty, starting in 2019.

Some U.S. states levy their own penalties on those who do not buy health insurance. Since 2006, Massachusetts, for example, has required its residents to have health insurance or pay a fine. This has helped encourage insurance rates as high as 95.4% in the state.

Single-payer insurance systems

Under a single-payer system, all health costs are paid by the government using tax revenue. This allows countries to control costs by having the government play a stronger role in negotiating prices for healthcare. Health insurance is universal and offered by a single entity. However, medical care itself is provided by private-sector doctors and hospitals.

Examples of this model include Canada and France. Private-sector insurers also exist in these countries, but they play a minor role as providers of supplemental coverage.

National health care systems

In these systems, both insurance and medical care are provided by the government.

In the United Kingdom’s National Health Service, the government owns most of the hospitals and employs medical providers. Sweden’s publicly funded system mostly provides care through government providers, though private companies play a limited role. Socialized systems are less common than single-payer ones.

The global pandemic has increased pressure on America’s complex and expensive healthcare system, making it more urgent to lower costs and perhaps provide universal healthcare.

Special Considerations

In the U.S., the Affordable Care Act increased the number of insured people but has not achieved universal healthcare coverage. The U.S. Department of Health reported that the percentage of U.S. adults without health insurance stood at 8% in 2022. The other 92% of people have health insurance through a mix of government and private insurance providers.

In the world of employer-based insurance, large companies often use a mix of private and self-insurance to cover a percentage of their employees’ health costs.

Also, since 2011, the federal government has provided incentives for private insurers to compete against government programs such as Medicare by providing lower costs and more benefits to enrollees. Some of the best Medicare Advantage plans are excellent examples. Recipients of Medicaid choose a private insurance plan for which state and federal governments pay much of the costs.

This mix of approaches may encourage competition and entrepreneurial opportunities, and offer consumers choice and incentives to try to keep healthcare costs down. But it results in a very expensive healthcare system that falls short in delivering universal care and on many measures of public health.

These issues are likely to be pivotal ones in the party platforms and the 2024 presidential campaign.