Tag: universal health care

List of Countries with Universal Healthcare

Update 1/21/2013: With the Supreme Court’s decision to uphold the ACA (aka Obamacare), and President Obama’s inauguration to a second term today, the US will have universal health care in 2014 using an insurance mandate system.

Thirty-two of the thirty-three developed nations have universal health care, with the United States being the lone exception [1]. The following list, compiled from WHO sources where possible, shows the start date and type of  system used to implement universal health care in each developed country [2]. Note that universal health care does not imply government-only health care, as many countries implementing a universal health care plan continue to have both public and private insurance and medical providers.

Country Start Date of Universal Health Care System Type
Click links for more source material on each country’s health care system.
Norway 1912 Single Payer
New Zealand 1938 Two Tier
Japan 1938 Single Payer
Germany 1941 Insurance Mandate
Belgium 1945 Insurance Mandate
United Kingdom 1948 Single Payer
Kuwait 1950 Single Payer
Sweden 1955 Single Payer
Bahrain 1957 Single Payer
Brunei 1958 Single Payer
Canada 1966 Single Payer
Netherlands 1966 Two-Tier
Austria 1967 Insurance Mandate
United Arab Emirates 1971 Single Payer
Finland 1972 Single Payer
Slovenia 1972 Single Payer
Denmark 1973 Two-Tier
Luxembourg 1973 Insurance Mandate
France 1974 Two-Tier
Australia 1975 Two Tier
Ireland 1977 Two-Tier
Italy 1978 Single Payer
Portugal 1979 Single Payer
Cyprus 1980 Single Payer
Greece 1983 Insurance Mandate
Spain 1986 Single Payer
South Korea 1988 Insurance Mandate
Iceland 1990 Single Payer
Hong Kong 1993 Two-Tier
Singapore 1993 Two-Tier
Switzerland 1994 Insurance Mandate
Israel 1995 Two-Tier
United States 2014? Insurance Mandate

Will the United States join this list in 2014?

[1] Roughly 15% of Americans lack health insurance coverage, so the US clearly has not yet achieved universal health care. There is no universal definition of developed or industrialized nations. For this list, those countries with UN Human Development Index scores above 0.9 on a 0 to 1 scale are considered developed.

[2] The dates given are estimates, since universal health care arrived gradually in many countries. In Germany for instance, government insurance programs began in 1883, but did not reach universality until 1941. Typically the date provided is the date of passage or enactment for a national health care Act mandating insurance or establishing universal health insurance.

System Types:

Single Payer: The government provides insurance for all residents (or citizens) and pays all health care expenses except for co-pays and coinsurance. Providers may be public, private, or a combination of both.

Two-Tier: The government provides or mandates catastrophic or minimum insurance coverage for all residents (or citizens), while allowing the purchase of additional voluntary insurance or fee-for service care when desired. In Singapore all residents receive a catastrophic policy from the government coupled with a health savings account that they use to pay for routine care. In other countries like Ireland and Israel, the government provides a core policy which the majority of the population supplement with private insurance.

Insurance Mandate: The government mandates that all citizens purchase insurance, whether from private, public, or non-profit insurers. In some cases the insurer list is quite restrictive, while in others a healthy private market for insurance is simply regulated and standardized by the government. In this kind of system insurers are barred from rejecting sick individuals, and individuals are required to purchase insurance, in order to prevent typical health care market failures from arising.

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How Much Would Universal Healthcare Cost?

Universal health care would cost $70 Billion for 2009 if enacted using a market-based approach, but this cost will grow rapidly if overall health care inflation is not tamed.

How much would health coverage for all uninsured Americans really cost? Critics maintain that covering all Americans would break the US budget (which is already overstretched), while advocates maintain that covering all Americans can be done affordably. But how much would universal coverage really cost?

The Commonwealth Fund provides a great summary of the costs of proposals under consideration, including Medicare for all, a Building Blocks extension of the current system, and other proposals. Proponents of universal Medicare claim that it will save the US $58 Billion in 2010, since Medicare operates more efficiently than private insurers [1]. Providing universal coverage through incremental changes could cost anywhere between $48B and $120B, according to analyses by the Urban Institute and the Lewin Group, a private health care consultancy. And while Medicare for all would lower total health care spending, it would raise the Federal government’s share of spending by almost $200 Billion per year.

With numbers all over the map, is it possible to come up with a plausible estimate for comparison purposes? Sites like ehealthinsurance.com now make it much easier to get estimates for insurance coverage. Using this data, we can estimate how much basic health insurance coverage would cost for the 45 million uninsured Americans. The experience of Massachusetts, which has implemented universal health care, can also be used to project an estimate for the rest of the country. Since Massachusetts’ health care costs are above US average, this provides a high-side estimate.

Using market insurance quotes, the cost of providing a health insurance with a $1000 deductible and prescription coverage would amount to $2500 per person annually, or roughly $115B per year [2]. This calculation uses different insurance rates for different age groups among the uninsured, based on this demographic breakdown of the uninsured provided by the Kaiser Foundation. In Massachusetts’ experience, covering each uninsured individual costs roughly $3400 per year. Covering all 45 million uninsured Americans at this rate would cost $150 Billion per year.

The midpoint of these estimates is around $130 Billion per year. To get a final estimate, money currently spent on uncompensated care must be subtracted out, since there is no uncompensated care in a universal health care system. Approximately $58 Billion will be spent on uncompensated care in 2009 [3], and subtracting this figure out leaves roughly $70 Billion in annual expenditure required for universal health care.

While $70 Billion per year sounds like a lot of money, it’s actually less than many estimates. It looks increasingly likely that some kind of health care reform will be passed in 2009, and that money will be found to pay for it for the moment. The bigger question is, how will it be paid for tomorrow? Unless health care cost growth is pulled into line with inflation, no one has that answer.

[1] Medicare doesn’t have to perform medical underwriting, and it doesn’t have to spend money on advertising, sales, or shareholder dividends, so its overhead should be lower than private competitors, if it can maintain efficiency. Critics counter that Medicare suffers from high fraud rates precisely because it is a government bureaucracy without competition to force it to raise efficiency and tighten controls.

[2] Here is the rough cost estimate for each demographic group, taken from quotes on ehealthinsurance.com:

0-19: $100/month  (20% of all uninsured)

20-29: $150/month (29% of all uninsured)

30-44: $200/month (27% of all uninsured)

45-64: $400/month (24% of all uninsured)

Using these numbers, we calculate a weighted average cost per person of $213 per month, or $2556 per year. That’s $115 Billion for 45 million people.

[3] In 2004, uncompensated care expense was estimated at $40.7 Billion. Since health care spending (in nominal dollars) has grown at 7.5% per year during this decade, the adjusted number for 2009 is approximately $58 Billion. This assumes that uncompensated care is growing in line with health care costs as a whole.

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America’s Broken Universal Health Care

The United States provides universal health care. Sound laughable? It’s true: all individuals in America, whether citizens, immigrants, or tourists, are entitled to government subsidized care in the event of medical emergency. While the uninsured may not be able to get a routine doctor’s appointment, they are guaranteed life saving surgery and medical intervention, regardless of cost. Indeed, care for indigents can occasionally run into the hundreds of thousands per year, as they repeatedly return to the emergency room for treatments of illness caused by chronic diseases like diabetes. The US spends roughly 75 billion annually on treating the nation’s 40+ million uninsured; the situation among alcoholics in Seattle has become so absurd that they are being given housing and routine medical care, since this decreases the cost of treating them in emergency situations.

Perhaps it is no surprise then that America spends a larger percentage of its GDP on health care than almost any other nation, and yet it lags on a wide range of health indicators, including overall life expectancy. How did such a situation emerge? Largely by accident, it turns out. In 1986, the EMTALA was passed by Congress, denying hospitals the right to refuse critically ill patients. Federal and state governments partially reimburse providers for costs incurred for this treatment through Medicaid and Medicare. Unfortunately, critical care is provided without any cost-benefit analysis whatsoever; it is considered a criminal act to withhold treatment from elderly, terminally ill patients, even if it would extend their life by a matter of weeks.

As US healthcare costs continue to spiral upward at rates often double and triple that of overall inflation, the situation becomes increasingly untenable. But what are the alternatives to America’s current system?

1. Remove required treatment burdens from hospitals, leaving the burden of care to individuals, charities, and local and state government.

2. Provide routine medical care to the uninsured, eliminating the treatment gap for the uninsured.

3. Require all Americans to buy insurance, or to pay a healthcare tax to pay for the implied insurance provided by emergency rooms.

4. Begin to consider rationing publicly funded health care based on cost-benefit analysis, taking into account a procedure’s likelihood of success, its cost, the patient’s age, and other factors.

Option 1 is politically infeasible for an industrialized nation, and is included only for completeness. Providing routine medical care to the uninsured, as in option 2, would expand America’s current system to be more similar to European systems of comprehensive universal public health care. Nations like the UK and Canada ration non-critical care within their systems in order to control costs; the very notion of health care rationing is anathema in the US currently, making public dialogue on public universal care close to impossible. Australia, meanwhile, has a hybrid healthcare system which includes public insurance for all while enabling private care to co-exist, potentially providing a model for US healthcare reform.

Massachusetts has begun a program similar to that outlined in option 3, in which all residents without insurance are required to purchase insurance or pay a tax to subsidize the emergency coverage that all residents receive. Poor residents are provided with assistance to pay for an insurance policy, enabling all residents to acquire coverage. This system provides the benefit of extending coverage across the population, while forcing everyone to contribute, thus averaging out costs across healthy and less healthy individuals. Since the system provides a net increase in medical coverage, however, it will result in increased costs over time.

This brings us to option 4, the unspeakable in the American health care dialogue: rationing. In practical terms, medical decision-makers find it difficult to discuss the notion of saving $100,000 by not performing a procedure, even if it has a 1 in 1,000 chance of success. Cost-benefit based rationing of care is not a solution to the problems of health care access. Rather, it is an eventuality that will have to be confronted, as public expenditure on health care cannot forever grow faster than the economy. Until then, America’s broken universal healthcare system will continue to plod along, destined to hit the wall when we just can’t find another dollar to keep 95 year-old vegetables alive another minute.

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