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What is universal health care coverage?

A brief overview...
  • Universal health care is one of three major possible health care models
  • The U.S. has some universal, public forms of health insurance, such as Medicare and Medicaid
  • Universal health care has the potential to lower the cost of medical care and prescription drugs and to equalize access to health care in a country
  • Universal health care also has some problems, such as long wait times and increased tax rates
  • The failure of the public option of the Affordable Care Act does not spell the end of the Universal Health Care debate in the U.S.

These days, healthcare is a hot topic. More than ever before in the nation’s history, people are researching, recommending and debating about different models for the provision of health care and which direction the country should take.

A lot of verbiage gets tossed around by pundits or on social media. Universal health care, socialist health care, single payer, Obamacare. It can be difficult to keep it all straight or have an informed opinion on the matter.

Read on to discover what universal health care is and how these issues affect the fate of millions of individuals who seek care in the world each day.

Universal healthcare may be a way off for Americans, but you can find an affordable private health insurance plan with our free search tool!

Models of Health Care Systems

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Put simply, there are three general types of health care systems:

  • Out-of-pocket
  • Insurance-based
  • Universal

Out-of-pocket health care systems are an extreme example of health care inequity. These systems require that people pay for 100 percent of their medical care, whether emergent, urgent or preventative, to the health care provider directly. That means only the wealthiest in the population can access medical care. While this seems extremely unjust, it is how health care is run in many developing countries around the world who lack a national health care system.

Insurance-based systems provide health care to the public using a system of risk and cost sharing among pools of people. Each person in the pool pays the insurance company a monthly premium. In return, the insurance company mitigates the devastating costs of a medical emergency should one occur. The insurance company also shares the cost of routine appointments and procedures with the individual, otherwise known as a copayment.

Ideally, the insurance pools in an insurance-based health care system contain more healthy people than sick people. The premiums of healthy people who underuse medical services pay for the care of sick people who overuse those services.

If only sick individuals comprise the insurance pool, the monthly premiums rise for everyone in the pool to compensate for that increased expense. This is one reason the Affordable Care Act (ACA) includes an individual mandate, to ensure that enough healthy people pay premiums into the insurance pool.

The third type of health care system is universal health care. Under a universal health care system, all citizens of a country are insured and have equal access to health care. This is achieved by raising taxes to finance the health care system or payment into an inexpensive National Health Insurance. Most industrialized, developed nations in the world offer some form of universal health care to their citizens.

The United States mixes these three types of models. Certain procedures, such as cosmetic surgeries, are only offered for out-of-pocket payments. Other medically-required or therapeutic procedures and treatments are covered by insurance for a copayment. Medicare and Medicaid are micro versions of universal, or state-sponsored health care.

Universal Health Coverage

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Universal health coverage, sometimes referred to as universal health care, achieves three main objectives set out by the World Health Organization (WHO). To be considered universal, health care must be:

  • Equitable, meaning everyone receives the medical care they need, regardless of their ability to pay for them.
  • Effective, so that medical services improve health

Risk-free, meaning a medical emergency cannot threaten financial catastrophe on a family or recipient of medical care.

According to the WHO, health care is a right of all humans, and universal health care is the only health care model that is capable of supporting that right. That health care is a basic human right is not the belief of all people and organizations, and for that reason, there are countries, including the United States, which do not model their health care on a universal system.

Advantages and Disadvantages of Universal Health Care

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The United States health insurance system is largely tied to employment. Citizens fear losing jobs, changing jobs, creating a private practice, freelancing or consulting because they fear to lose their health insurance. While the Affordable Care Act created the Marketplace, where individuals can buy plans directly from insurance companies, sometimes subsidized by the government to mitigate financial costs, lack of funding and barriers to the full execution of the Affordable Care Act creates many gaps in services and subsidies. This makes buying private insurance expensive for many.

Under a universal health care system, employment status has no effect on health insurance coverage. Universal health care’s commitment to equity prohibits providing health care to only to those who are employed or to those who can afford it.

Universal health coverage, especially a single-payer system such as that of Canada, has a dramatic effect on the cost of services and prescription drugs. Because they government is the buyer of health insurance for millions of people, it has tremendous bargaining power in dealings with pharmaceutical companies. This negotiation potential is a major selling point of universal health care systems.

Further, everyone served by a universal health care system invests in health care. Universal health care is almost always paid for with tax increases, meaning all citizens pay into the system.

Since doctors and hospitals in the U.S. are not permitted to turn sick individuals away, regardless of whether they are insured, much care in the United States is paid for with increased premiums on the insured, which unfairly penalizes those with insurance policies.

A universal health care system does have some cons. For example, under a universal system, citizens are less able to demand specialty tests or innovative care because the government prescribes acceptable forms of treatment for a particular condition.

Wait times can also be longer under universal health care. It can take a month to find an available appointment with a specialist in Canada.

Universal health coverage does require an increase in taxes paid by everyone in a country. In the end, however, the tax increase is typically less expensive than insurance premiums and copays in a private system.

Universal Health Care in the U.S.

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There are some universal forms of health care in the United States. Medicare is a single payer system, for example. Individuals pay into Medicare through payroll taxes throughout life and receive free, government-sponsored care in retirement. While this does not satisfy the WHO’s objective of equity per se, it does provide equitable service to all people over 65, regardless of income or health status. Medicaid is also a form of public health insurance, however, it is not a single payer system.

During negotiations and debates over the Affordable Care Act, many legislators proposed establishing a “public option” on the Marketplace. The public option would have capped rising premiums by offering individuals a low-cost option. This competition with private insurance companies prevents soaring premiums, a major criticism of the Affordable Care Act today.

The public option was never included in the bill due to bipartisan, ideological disagreements over the role of government in the provision of health care in the U.S.

In conclusion, universal healthcare is not as revolutionary as it may seem on the surface. Many large, developed countries like Canada, Great Britain, Germany, the Scandinavian countries and most of the European Union have enjoyed tremendous success with this model of health care, spending far less per capita on health care services and prescription drugs than the U.S. While the fate of the Affordable Care Act is uncertain, its repeal may open a door for more discussion about universal coverage, single-payer “Medicare for all” and public options in the future of American health care.

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