It took 10 years of political tension to establish Australia’s universal public health insurance program, known as Medicare.
A universal health care bill was initially introduced in Parliament in 1973 but failed three times to pass through the Senate. Because of these failed attempts, a new parliamentary election was called, a procedure known as double dissolution, to resolve the deadlock. The new Parliament passed the health care legislation in 1974, establishing free public hospital care and subsidized private care. However, following a change in government in 1975, access to free health care services was limited to retired persons who met stringent means tests.
After another change of government in 1984, the current Medicare system was established. Medicare provides free public hospital care and substantial coverage for physician services and pharmaceuticals for Australian citizens, residents with permanent visas, and New Zealand citizens following their enrollment in the program and confirmation of identity.1 Restricted access is provided to citizens of certain other countries through formal agreements.2 Other visitors to Australia, as well as undocumented immigrants, do not have access to Medicare and are treated as private-pay patients, including those needing emergency services.
Role of government: Three levels of government are collectively responsible for providing universal health care:
The federal government provides funding and indirect support for inpatient and outpatient care through the Medicare Benefits Scheme (MBS) and for outpatient prescription medicine through the Pharmaceutical Benefits Scheme (PBS). The federal government is also responsible for regulating private health insurance, pharmaceuticals, and therapeutic goods; however, it has a limited role in direct service delivery.
States own and manage service delivery for public hospitals, ambulances, public dental care, community health (primary and preventive care), and mental health care. They contribute their own funding in addition to that provided by federal government. States are also responsible for regulating private hospitals, the location of pharmacies, and the health care workforce.
Local governments play a role in the delivery of community health and preventive health programs, such as immunizations and the regulation of food standards.3
At the federal level, intergovernmental collaboration and decision-making occur through the Council of Australian Governments (COAG), with representation from the prime minister and the first ministers of each state. The COAG focuses on the highest-priority issues, such as major funding discussions and the interchange of roles and responsibilities among governments. The COAG Health Council is responsible for more detailed policy issues and is supported by the Australian Health Minister’s Advisory Council.
The federal Department of Health oversees national policies and programs, including the MBS and PBS. Payments through these schemes are administered by the Department of Human Services.
Other federal agencies involved in health care include the following:
- The Pharmaceutical Benefits Advisory Committee provides advice to the Minister for Health on the cost-effectiveness of new pharmaceuticals (but not routinely on delisting).
- The Australian Digital Health Agency is responsible for matters relating to electronic health data, and the Australian Institute of Health and Welfare and the Australian Bureau of Statistics (ABS) also provide health data.
- The Therapeutic Goods Administration oversees supply, imports, exports, manufacturing, medical devices, pharmaceutical safety, and advertisement.
- The Australian Health Practitioner Regulation Agency ensures registration and accreditation of the workforce in partnership with national boards.
- The Australian Prudential Regulation Authority regulates private health insurance, and the Australian Competition and Consumer Commission promotes competition among private health insurers.
The state governments operate their own departments of health and have delegated the management of hospitals to Local Hospital Networks. These hospital networks are responsible for working collaboratively with federally funded Primary Health Networks, which were established in 2015 to improve the efficiency, effectiveness, and coordination of care. Primary Health Networks have boards comprising medical professionals and community advisory committees.
Role of public health insurance: Total health expenditures in 2015–2016 represented 10.3 percent of the GDP, an increase of 3.6 percent from 2014–2015. Two-thirds of these expenditures (67%) were funded by the government.4
Medicare is funded through the national tax system, in part by a government levy, which raised an estimated AUD 114.6 billion (USD 80.14 billion)5 in 2015–2016.6 Since 2014, a share of the money raised from this levy also supports the National Disability Insurance Scheme.
Role of private health insurance: Private health insurance is readily available and offers coverage for out-of-pocket fees and private providers, greater choice of providers (particularly in hospitals), faster access to nonemergency services, and rebates for selected services. Private health insurance may include coverage for hospital care, general treatment, or ambulance services. General treatment coverage provides insurance for dental, physiotherapy, chiropractic, podiatry, home nursing, and optometry services. Coverage may be capped by dollar amount or by number of services. For hospital services, patients can opt to be treated as a public patient (with full fee coverage) or as a private patient (with 75% fee coverage).
Government policies encourage enrollment in private health insurance through a tax rebate (8.5%–33.9%, depending on age and income) and an income-based penalty payment (1%–1.5%) for not having private insurance. This penalty, known as the Medicare Levy surcharge, applies only to singles with incomes above $90,000 and families with incomes above $180,000.7
The Lifetime Health Coverage program provides a lower health insurance premium for life. However, there is a 2 percent increase in the base premium for each year after age 30. Consequently, sign-up is highest among those 30 and under, with a trend to opt out starting at age 50.
Nearly half of the Australian population (46%) had private hospital coverage and nearly 55 percent had private general treatment coverage in 2016.8 However, coverage varies by socioeconomic status: Private health insurance covers just one in five (22%) of the most disadvantaged 20 percent of the population, but more than 57 percent of the most advantaged population quintile. This disparity is due, in part, to the Medicare Levy surcharge applied to higher-income earners.9
Insurers are a mix of for-profit and nonprofit providers. In 2015–2016, private health insurance expenditures represented 8.8 percent of all health spending.10
Services covered: The federal government defines and funds MBS benefits, which cover hospital care and medical services, including mental health and maternity care. MBS also provides for limited optometry and children’s dental care.
Pharmaceutical subsidies are provided by the government through the PBS. To be listed, pharmaceuticals need to be approved for cost-effectiveness by the Pharmaceutical Benefits Advisory Committee.
The federal government also funds cancer screening and immunization programs that are provided free to targeted population groups.
States are responsible for the delivery of free public hospital services, preventive care, chronic disease management, and supplementary mental health care not covered by Medicare. States also provide means-tested access to medical equipment such as wheelchairs.
Home care for the elderly and hospice care coverage are funded separately by Medicare (see “Long-term care and social supports,” below).
Cost-sharing and out-of-pocket spending: Out-of-pocket payments accounted for 16.5 percent of total health expenditures in 2016–2017. The largest share (68%) was for primary care, of which one-third (37%) was for medications, followed by hospital care (11%).11
Under Medicare, there are no deductibles or out-of-pocket costs for public patients receiving public hospital services. Cost-sharing for outpatient care varies. The federal government sets Medical Benefits Schedule (MBS) fees for general practitioner (GP) and specialty visits; it pays GPs 100 percent of the fee and specialists 85 percent. Patients pay the remaining 15 percent of specialist fees, as well as any surcharges. GPs and specialists can choose to charge above the MBS fees, although there is a maximum patient out-of-pocket fee of AUD 83.40 (USD 57.00) per service. About 86 percent of GP visits were provided without an additional charge to patients in 2016–2017.12 Patients who were charged paid an average of AUD 31 (USD 22).
Out-of-pocket outpatient pharmaceutical expenditures are capped under the PBS (see table). Consumers pay the full price of medicines not listed on the PBS. Pharmaceuticals provided to inpatients in public hospitals are generally free.
Safety nets: In addition to providing free public hospital care and capped drug costs, Australia has three safety nets to help with other out-of-pocket costs:
- The Original Medicare Safety Net covers the MBS fee for all out-of-hospital Medicare services above an annual out-of-pocket threshold of AUD 461 (USD 322). If there are charges above the fee, the individual is responsible for them.
- The Extended Medicare Safety Net covers 80 percent of out-of-pocket, out-of-hospital costs (these include costs above the MBS fee) over an annual threshold of AUD 668 (USD 467) for those with government-issued concession cards (e.g., low-income people, seniors, caregivers) and AUD 2,093 (USD 1,464) for others.
A maximum out-of-pocket fee per out-of-hospital service (known as the Greatest Permissible Gap) is set at AUD 83.40 (USD 57.00); this fee may be covered by private health insurance for those with coverage.13 War veterans, the widowed, and their dependents may be eligible for further discounts.
The constitution of Brazil defines health as a universal right and a state responsibility.1 The Brazilian health system, known as SUS (Sistema Único de Saúde), was conceived during the 1980s as part of the social movement aimed at Brazil’s re-democratization. SUS was officially created in 1988 by the new Brazilian constitution.
Three principles underpin SUS:
- The universal right to comprehensive health care at all levels of complexity (primary, secondary, and tertiary).
- Decentralization with responsibilities given to the three levels of government: federal, state, and municipal.
- Social participation in formulating and monitoring the implementation of health policies through federal, state, and municipal health councils.
Since 1990, the incremental expansion of SUS has enabled substantial progress toward achieving universal health coverage.
Role of government: The Ministry of Health is responsible for national coordination of SUS, including policy development, planning, financing, auditing, and control. State government duties include regional governance, coordination of strategic programs (such as provision of high-cost medicines), and delivery of specialized services that have not been decentralized to municipalities. The health departments in the 5,570 municipalities largely handle the management of SUS at the local level, including cofinancing, coordination of health programs, and delivery of health services.
Community participation in the public health system is guaranteed by the constitution at all levels of government. Health councils and health conferences are composed of 50 percent community members, 25 percent providers, and 25 percent health system managers. These councils and conferences are responsible for deliberating public health policies and monitoring their implementation.
Role of public health insurance: In 2015, health spending in Brazil was 9.1 percent of the gross domestic product (GDP),2 of which public spending accounted for 42.8 percent. SUS covers all types of health care for all residents and visitors, including undocumented people. No application process is needed to access health services.
Approximately 75 percent of Brazilian citizens rely solely on SUS. Bottlenecks in access and dissatisfaction with health services have prompted middle-income and high-income households to seek private care.3,4
The public system is financed by tax revenues and social contributions from all three levels of government. The minimum contribution rates for health expenditures are defined in law as follows:
- Federal: 15 percent of net current government income in 2017, adjusted for annual inflation.
- State: 12 percent of total revenue.
- Municipal: 15 percent of total revenue.
Over the past 30 years, the share of federal funding has declined, while funding from municipalities has increased. In 2017, the federal share was about 43 percent of total public expenditures, while states contributed nearly 26 percent and municipalities 31 percent. As a result, although municipalities are required to spend at least 15 percent of their own total revenues on health, in reality they spend, on average, nearly 24 percent.5
Role of private health insurance: Private health insurance is voluntary and supplementary to SUS and regulated by the National Agency of Supplementary Health. In 2018, 23 percent of Brazilians had private medical/hospital insurance, and 9.6 percent had dental insurance. Nearly 70 percent of beneficiaries receive their private health insurance as an employment benefit.
Private health plans offer health care services through their own facilities or through accredited health care organizations. Alternatively, private insurance can reimburse enrollees for purchased health care services.
Brazil spends 0.5 percent of GDP on tax exemptions for private health care, primarily to subsidize those who pay for private health insurance.6 Individuals and legal entities may deduct health insurance costs as well as the purchase of health services, medicines, and medical supplies from their taxable expenses.
Services covered: SUS offers a broad spectrum of health services free of charge, including7:
- preventive services, including immunizations
- primary health care
- outpatient specialty care
- hospital care
- maternity care
- mental health services
- physical therapy
- dental care
- optometry and other vision care
- durable medical equipment, including wheelchairs
- hearing aids
- home care
- organ transplant
- oncology services
- renal dialysis
- blood therapy.
The expansion of pharmaceutical coverage by the SUS was a pioneering initiative, as Brazil was one of the first middle-income countries in the world to offer free access to HIV/AIDS medication, beginning in 1996. Between 2002 and 2017, the list of essential medicines and medical products grew from 327 to 869. In addition, the Popular Pharmacy of Brazil program provides subsidized contraceptives as well as drugs for dyslipidemia, rhinitis, Parkinson’s, osteoporosis, and glaucoma, and free medication for hypertension, diabetes, and asthma.
Cost-sharing and out-of-pocket spending: Out-of-pocket expenditures account for a little more than 27 percent of total health expenditures.8 However, they represent a considerable financial burden for households, and disproportionately affect the poor. In 2014, 5.3 percent of households experienced such high health expenditures that they had to forgo paying for non-health-related items. The cost of medications was a primary contributor, as only certain drugs are available free of charge under SUS.9
Conversely, in the last 10 years, the share of private health care plans charging copayments has grown from 22 percent to 52 percent.10 However, no clear rules exist for setting copay limits in private insurance.
Canadian Medicare — Canada’s universal, publicly funded health care system — was established through federal legislation originally passed in 1957 and in 1966. The Canada Health Act of 1984 replaces and consolidates the two previous acts and sets national standards for medically necessary hospital, diagnostic, and physician services. To be eligible to receive full federal cash contributions for health care, each provincial and territorial (P/T) health insurance plan needs to comply with the five pillars of the Canada Health Act, which stipulate that it be:
- Publicly administered
- Comprehensive in coverage conditions
- Portable across provinces
- Accessible (for example, without user fees).
Role of government: Canadian P/T governments have primary responsibility for financing, organizing, and delivering health services and supervising providers. The jurisdictions directly fund physicians and drug programs, and contract with delegated health authorities (either a single provincial authority or multiple subprovincial, regional authorities) to deliver hospital, community, and long-term care, as well as mental and public health services.
The federal government cofinances P/T universal health insurance programs and administers a range of services for certain populations, including eligible First Nations and Inuit peoples, members of the Canadian Armed Forces, veterans, resettled refugees and some refugee claimants, and inmates in federal penitentiaries. It also regulates the safety and efficacy of medical devices, pharmaceuticals, and natural health products, funds health research and some information technology systems, and administers several public health functions on a national scale.
At the national level, a variety of governmental agencies oversee specific functions:
- Health Canada, which is the federal ministry of health, plays a key regulatory role in food and drug safety, medical device and technology review, and the upholding of national standards for universal health coverage.
- The Public Health Agency of Canada is responsible for public health, emergency preparedness and response, infectious and chronic disease control and prevention, and health promotion.
- A new federal government department, Indigenous Services Canada, funds certain health services for First Nations and Inuit.
Most providers are self-governing under P/T law; they are registered with a provincial regulatory body (such as the College of Physicians and Surgeons) that ensures that education, training, and quality-of-care standards are met.
Most provinces have an ombudsperson who advocates on behalf of patients.
Role of public health insurance: Total health spending is estimated to have reached 11.5 percent of GDP in 2017; the public sector and private sector accounted for approximately 70 percent and 30 percent of total health expenditures, respectively.1 Each P/T health insurance plan covers all medically necessary hospital and physician services (on a prepaid basis). Supplementary services, or those not covered under Canadian Medicare, are largely privately financed, either from patient out-of-pocket payments or through employer-based or private insurance.
Provinces and territories cover all of their own residents in accordance with their respective residency requirements.2 Temporary legal visitors, undocumented immigrants, visitors who stay in Canada beyond the duration of a legal permit, and those who enter the country illegally are not covered by any federal or P/T program. Provinces and territories provide limited emergency services to these populations — no physician or hospital can refuse to provide care in an emergency, and midwives provide some maternity services.3
The main funding source is general P/T government revenue. Most P/T revenue comes from taxation. About 24 percent (an estimated CAD 37 billion, or USD 29.4 billion, in 2017–2018) is provided by the Canada Health Transfer, the federal program that funds health care for provinces and territories.4
Role of private health insurance: Private insurance, held by about two-thirds of Canadians, covers services excluded under universal health coverage, such as vision and dental care, outpatient prescription drugs, rehabilitation services, and private hospital rooms. In 2015, approximately 90 percent of premiums for private health plans were paid through employers, unions, or other organizations under a group contract or uninsured contract (by which a plan sponsor provides benefits to a group outside of an insurance contract). In 2017, private insurance was estimated to account for 12 percent of total health spending. 5 The majority of insurers are for-profit.6
Services covered: To qualify for federal financial contributions, P/T insurance plans must provide first-dollar coverage of medically necessary physician, diagnostic, and hospital services (including inpatient prescription drugs) for all eligible residents. All P/T governments also provide public health and prevention services (including immunizations) as part of their public programs.
However, there is no nationally defined statutory benefit package; most public coverage decisions are made by P/T governments in conjunction with the medical profession. Because of this, coverage varies across P/T insurance plans for services not federally mandated as medically necessary, including outpatient prescription drugs, mental health care, vision care, dental care, home care, midwifery services, medical equipment, and hospice care.
Most provinces have public prescription drug coverage programs for specific populations, such as recipients of social assistance, seniors aged 65 and older, and children and youth. Some programs charge premiums, often income-related.7
There are some health services that, for the most part, are not covered by any P/T insurance plan, including dental services, physiotherapy, psychologist visits, chiropractic care, and cosmetic or plastic surgery.
Cost-sharing and out-of-pocket spending: There is no cost-sharing for publicly insured physician, diagnostic, and hospital services. Physicians are not allowed to charge patients prices above the negotiated fee schedule.
In 2016, out-of-pocket payments were estimated to represent about 15 percent of total health spending; the majority was spent on nonhospital institutions (mainly long-term care homes), prescription drugs, dental care, and vision care.8
Safety nets: To help cover needed prescriptions, provinces and territories provide outpatient drug plans to some individuals lacking private employer-sponsored insurance. Most P/T outpatient drug plans operate as payers of last resort, targeting people on social assistance or of retirement age. These plans vary considerably. For instance, Quebec administers a universal drug plan by mandating that eligible individuals have private coverage and enrolls those not eligible for private coverage in the public plan. In contrast, Ontario, Canada’s most populous province, administers a universal prescription drug program for seniors, children and youth without private coverage, and recipients of social assistance.
P/T governments also provide some relief for people with high out-of-pocket expenses. After citizens pay more than 3 percent of their net income, or CAD 2,288 (USD 1,816), whichever is less, for eligible medical expenses per year, they can receive a 15 percent tax credit for any remaining expenses.9
In addition, provinces and territories pay for accommodation and food expenses (beyond nursing care) of indigent individuals in publicly financed long-term care facilities.
China largely achieved universal insurance coverage in 2011 through three public insurance programs1:
- Urban Employee Basic Medical Insurance, mandatory for urban residents with formal jobs, was launched in 1998.
- The voluntary Newly Cooperative Medical Scheme was offered to rural residents in 2003.
- The voluntary Urban Resident Basic Medical Insurance was launched in 2007 to cover urban residents without formal jobs, including children, the elderly, and the self-employed.
In 2016, China’s central government, the State Council, announced that it would merge the Newly Cooperative Medical Scheme and Urban Resident Basic Medical Insurance to expand the risk pool and reduce administrative costs.2 This consolidation is still underway. The combined public insurance program is now called Urban-Rural Resident Basic Medical Insurance.
Because China has a huge population, insurance coverage was increased gradually. In 2011, approximately 95 percent of the Chinese population was covered under one of the three medical insurances. Insurance coverage is not required in China.
Role of government: China’s central government has overall responsibility for national health legislation, policy, and administration. It is guided by the principle that every citizen is entitled to receive basic health care services. Local governments — provinces, prefectures, cities, counties, and towns — are responsible for organizing and providing these services.
Both national and local health agencies and authorities have comprehensive responsibilities for health quality and safety, cost control, provider fee schedules, health information technology, clinical guidelines, and health equity.
In March 2018, the State Council reorganized the central government’s health care structure. The responsibilities of various agencies include the following:
- The National Health Commission is the main national health agency. The commission formulates national health policies; coordinates and advances medical and health care reform; and supervises and administers public health, medical care, health emergency response, and family planning services. The State Administration of Traditional Chinese Medicine is affiliated with the agency.
- The State Medical Insurance Administration oversees the basic medical insurance programs, catastrophic medical insurance, a maternity insurance program, the pricing of pharmaceutical products and health services, and a medical financial assistance program.
- The National People’s Congress is responsible for health legislation. However, major health policies and reforms may be initiated by the State Council and the Central Committee of the Communist Party, and these are also regarded as law.
- The National Development and Reform Commission oversees health infrastructure plans and competition among health care providers.
- The Ministry of Finance provides funding for government health subsidies, health insurance contributions, and health system infrastructure.
- The newly created State Market Regulatory Administration includes the China Drug Administration, which is responsible for drug approvals and licenses.
- The China Center for Disease Control and Prevention, although not a government agency, is administrated by the National Health Commission.
- The Chinese Academy of Medical Science, under the National Health Commission, is the national center for health research.
Local governments (of prefectures, counties, and towns) may have their own commissions, bureaus, or health departments. Centers for disease control and prevention also exist in local areas and are likewise administered by local commissions, bureaus, or health departments. At the national level, the China Center for Disease Control and Prevention provides only technical support to the local centers.
Role of public health insurance: In 2018, China spent approximately 6.6 percent of GDP on health care, which amounts to CNY 5,912 billion (USD 1,665 billion).3 Twenty-eight percent was financed by the central and local governments, 44 percent was financed by publicly funded health insurance, private health insurance, or social health donations, and 28 percent was paid out-of-pocket.4
Urban Employee Basic Medical Insurance is financed mainly from employee and employer payroll taxes, with minimal government funding. Participation is mandatory for workers in urban areas. In 2018, 316.8 million had employee-based insurance.5 The base of the employee payroll tax contribution is capped at 300 percent of the average local salary; individual payroll above this level is not taxed. In most provinces, individual tax rates are about 2 percent. Tax rates for employers vary by province. The base for employer contributions is the sum of employees’ payrolls. Workers’ nonemployed family members are not covered.
Urban-Rural Resident Basic Medical Insurance covers rural residents and urban, self-employed individuals, children, students, elderly adults, and others. The insurance is voluntary at the household level. In 2018, 897.4 million were covered under the two insurance schemes (the rural plan and the urban nonemployed plan) that make up this program.
Urban-Rural Resident Basic Medical Insurance is financed through annual fixed premiums. Individual premium contributions are minimal, and government subsidies for insurance premiums make up the majority of insurer revenues. In regions where the economy is less developed, the central government provides a much larger share of subsidies than provincial and prefectural governments. In more-developed provinces, most subsidies are locally provided (mainly by provincial governments).
The few permanent foreign residents are entitled to the same coverage benefits as citizens. Undocumented immigrants and visitors are not covered by publicly financed health insurance.
Role of private health insurance: Purchased primarily by higher-income individuals and by employers for their workers, private insurance can be used to cover deductibles, copayments, and other cost-sharing, as well as to provide coverage for expensive services not paid for by public insurance.
No statistics are available on the percentage of the population with private coverage. Private health insurance is provided mainly by for-profit commercial insurance companies.
The total value of private health insurance premiums grew by 28.9 percent per year between 2010 and 2015.6 In 2015, private health insurance premiums accounted for 5.9 percent of total health expenditures.7 The Chinese government is encouraging development of the private insurance market, and some foreign insurance companies have recently entered the market.
Services covered: The benefit package is often defined by the local governments. Publicly financed basic medical insurance typically covers:
- inpatient hospital care (selected provinces and cities)
- primary and specialist care
- prescription drugs
- mental health care
- physical therapy
- emergency care
- traditional Chinese medicine.
A few dental services (such as tooth extraction, but not cleaning) and optometry services are covered, but most are paid out-of-pocket. Home care and hospice care are often not included either. Durable medical equipment, such as wheelchairs and hearing aids, is often not covered.
Preventive services, such as immunization and disease screening, are included in a separate public-health benefit package funded by the central and local governments; every resident is entitled to these without copayments or deductibles. Coverage is person-specific; there are no family or household benefit arrangements.
Maternity care is also covered by a separate insurance program; it is currently being merged into the basic medical insurance plan.
Cost-sharing and out-of-pocket spending: Inpatient and outpatient care, including prescription drugs, are subject to different deductibles, copayments, and reimbursement ceilings depending on the insurance plan, region, type of hospital (community, secondary, or tertiary), and other factors:
- Copayments for outpatient physician visits are often small (CNY 5–10, or USD 2–3), although physicians with professor titles have much higher copayments.
- Prescription drug copayments vary; they were about 50 percent to 80 percent of the cost of the drug in Beijing in 2018, depending on the hospital type.
- Copayments for inpatient admissions are much higher than for outpatient services.
There are no annual caps on out-of-pocket spending. In 2018, out-of-pocket spending per capita was CNY 1,186 (USD 262)—representing about 28 percent of total health expenditures.8 A fairly high percentage of out-of-pocket spending is for prescription drugs.
The public insurance programs only reimburse patients up to a certain ceiling, above which residents must cover all out-of-pocket costs. Reimbursement ceilings are significantly lower for outpatient care than for inpatient care. For example, in 2018, the outpatient care ceiling was CNY 3,000 (USD 845) for Beijing residents under Urban-Rural Resident Basic Medical Insurance. In comparison, the ceiling for inpatient care was CNY 200,000 (USD 56,338). Annual deductibles have to be met before reimbursements, and different annual deductibles may apply for outpatient and inpatient care.
Preventive services, such as cancer screenings and flu vaccinations, are covered by a separate public health program. Children and the elderly have no copayments for these services, but other residents have to pay 100 percent of these services out-of-pocket.
People can use out-of-network health services (even across provinces), but these have higher copayments.
Safety nets: For individuals who are not able to afford individual premiums for publicly financed health insurance or cannot cover out-of-pocket spending, a medical financial assistance program, funded by local governments and social donations, serves as a safety net in both urban and rural areas.
The medical financial assistance program prioritizes catastrophic care expenses, with some coverage of emergency department costs and other expenses. Funds are used mainly to pay for individual deductibles, copayments, and medical spending exceeding annual benefit caps, as well as individual premiums for publicly financed health insurance. In 2018, 76.7 million people (approximately 5.5% of the population) received such assistance for health insurance enrollment, and 53.6 million people (3.8% of the population) received funds for direct health expenses.9
All registered Danish residents are automatically enrolled in publicly financed health care, which is largely free at the point of use. Registered immigrants and asylum-seekers are also covered, while undocumented immigrants have access to acute-care services through a voluntary, privately funded initiative supported by the Danish Medical Association, the Danish Red Cross, and the Danish Refugee Council.
Danes can choose from two public insurance options. Practically all Danes (98%) choose Group 1 coverage, under which general practitioners (GPs) act as gatekeepers and patients need a referral to see specialists, except for a few specialties. The remaining 2 percent of Danes choose Group 2 coverage, which allows access to specialists without a referral, although copayments apply. Under both insurance options, access to hospitals requires a referral.
Universal access to health care underlies Denmark’s Health Law, which sets out the government’s obligation to promote population health and prevent and treat illness, suffering, and functional limitations; to ensure high-quality care and easy and equal access; and to promote service integration, choice, transparency, access to information, and short waiting times.
Universal coverage developed gradually, starting in the latter part of the 1800s with nongovernmental insurance, known as sickness funds, covering primary care and user charges for hospital care. In 1973, the current universal public coverage system was founded through legislative reform.
Role of government: The national government sets the regulatory framework for health services and is in charge of general planning, monitoring care quality, and licensing health care professionals. The national government also collects taxes and allocates funding to regions and municipalities based on sociodemographic criteria and activity.
The state does not have a direct role in the delivery of health care services. Five regions governed by democratically elected councils are responsible for the planning and delivery of specialized health care services and play a role in specialized social care and coordination. The regions own, manage, and finance hospitals. They also finance the majority of services delivered by private general practitioners (GPs), office-based specialists, physiotherapists, dentists, and pharmacists, as well as specialized rehabilitation. Eighty percent of funding for the regions comes from the state, and 20 percent from municipalities.
Municipalities are responsible for financing and delivering nursing home care, home nurses, health visitors, some dental services, school health services, home help, substance use treatment, public health and health promotion, and general rehabilitation.
The general regulation, planning, and supervision of health services, including overall cost-control mechanisms, take place at the national level through Parliament, the Ministry of Health, and four governmental agencies:
- The Health Authority, which provides general monitoring and regulation of quality through such measures as clinical guidelines and licensing of health care personnel, usually in close collaboration with representatives from medical societies
- The Medicines Agency, which regulates market access and pharmacovigilance, among other functions
- The Patient Safety Authority, which handles patient complaints and compensation claims, collects information about errors to foster systematic learning, and provides information about treatment abroad
- The Health Data Authority, which handles data collection and infrastructure
- The Danish Agency for Patient Complaints.
National authorities also have important roles in planning the location of specialist services, approving regional hospital plans, and approving mandatory health agreements between regions and municipalities to coordinate service delivery. In addition, the Health Data Agency provides online access to benchmarking data related to service, quality, and number of treatments performed, as well as data from clinical registries and information about pharmaceutical prices and reimbursement levels.1
Danish Regions and Local Government Denmark negotiate economic agreements on behalf of regions and municipalities and participate in monitoring agreed-upon performance targets. They also play important roles in collecting and sharing knowledge to facilitate development and implementation.
Organized patient groups engage in policymaking at the national, regional, and municipal levels.
Role of public health insurance: Public expenditures accounted for 84 percent of total health spending in 2016, representing 8.7 percent of GDP. Overall, health care expenditures represented 10.4 percent of GDP.2 It should be noted that Denmark includes long-term care services in its accounting for total health care spending, unlike other Organisation for Economic Co-operation and Development (OECD) countries.3
Health care is financed mainly through a progressive national income tax. The national government allocates heath care funding to regions and municipalities, mostly as block grants, with amounts adjusted for demographic and social differences. These grants finance 77 percent of regional health functions. A minor portion of state funding for regional and municipal services is tied to specific priority areas and targets, usually defined in the annual economic agreements between the national government and the municipalities or regions. Current targets incentivize a continued transition from hospital-based care to primary care and home-based care. The remainder of financing for regional services comes from municipal activity-based payments, which are financed through a combination of municipal progressive income taxes and state block grants.
Role of private health insurance: Complementary voluntary health insurance, purchased on an individual basis, covers statutory copayments — mainly for pharmaceuticals and dental care — and services not fully covered by the state, such as physiotherapy. Some 2.45 million Danes (42%) have such coverage, which is provided almost exclusively by the nonprofit organization Danmark.4
In addition, nearly 1.69 million Danes (30%) hold supplementary insurance to gain expanded access to private providers, mostly for physiotherapy and minor elective surgeries.5 Seven for-profit insurers sell policies, which are provided mainly through private employers as a fringe benefit, although some public-sector employees are also covered. Students, pensioners, the unemployed, and others outside the job market are generally not covered by supplementary insurance.
Private expenditures accounted for nearly 16 percent of health care spending in 2016.6
Services covered: The national, publicly financed health care system fully covers the following services:
- primary and preventive care
- specialist care
- hospital care, including inpatient prescription drugs
- mental health care
- long-term care
- dental services for children under age 18.
Outpatient prescription drugs, adult dental care, physiotherapy, and optometry services are partially covered through subsidies.
Home care is organized and financed by the municipalities. Municipalities also fully finance maternity care, preventive home visits for infants, and consultations for toddlers and preschoolers. Municipalities are also responsible for providing durable medical equipment for citizens with a permanent need. Hospice care is financed and delivered by the regions.
There is no nationally defined benefit package for health care. Decisions about levels of service and new medical treatments are made by the regions, within a framework of national laws, agreements, guidelines, and standards. Municipalities decide on the service level for most other welfare services, including social care, within a framework of national regulation. In practice, most evidence-based treatments are covered. These include fertility treatment (with some limitations) and necessary cosmetic surgery.
Cost-sharing and out-of-pocket spending: Cost-sharing is applied to adult dental care (coinsurance 35%–60%), outpatient prescriptions, temporary home care, residential long-term care, corrective lenses, and travel vaccinations. There is no cost-sharing for hospital care, primary care services, dental care for children under age 18, childhood immunizations, cancer screenings, maternity care, hospice care, or permanent home care. Only Danes who choose Group 2 insurance coverage owe a copayment when visiting a specialty physician.
Household out-of-pocket payments represented 13.7 percent of total health expenditures in 2016, covering mostly outpatient drugs, corrective lenses, hearing aids, dental care, and payments to private specialists and clinics outside the public referral scheme.7
Safety nets: Because most care is covered under public health insurance, there is limited need for safety nets. Danes receive subsidies for outpatient drugs, and there is a yearly out-of-pocket maximum for drugs (see table).8,9 There are also subsidies for physiotherapy and adult dental care. In addition, the municipalities provide means-tested social assistance to older people for long-term care.
Health coverage in England has been universal since the creation of the National Health Service (NHS) in 1948. The NHS was set up under the National Health Service Act of 1946, based on the recommendations of a report to Parliament by Sir William Beveridge in 1942. The Beveridge Report outlined free health care as one aspect of wider welfare reform designed to eliminate unemployment, poverty, and illness, and to improve education. Under the 1946 Act, the Minister of Health had a duty to provide a comprehensive, free health service, replacing voluntary insurance and out-of-pocket payments.2
Currently, all those “ordinarily resident” in England are automatically entitled to NHS care, still largely free at the point of use, as are nonresidents with a European Health Insurance Card. For other people, such as non-European visitors or undocumented immigrants, only treatment in an emergency department and for certain infectious diseases is free.3 Rights for those eligible for NHS care are summarized in the NHS Constitution; they include the right to access care without discrimination and within certain time limits for certain categories, such as emergency and planned hospital care.4
Role of government: Responsibility for health legislation and general policy in England rests with Parliament, the Secretary of State for Health, and the Department of Health. Day-to-day responsibility for the NHS lies with NHS England, an arm’s-length, government-funded body run separately from the Department of Health.5 Its responsibilities include:
- managing the NHS budget
- overseeing 191 local Clinical Commissioning Groups (CCGs), which are groups of local general practitioners (GPs) who plan, commission, and pay for most of the hospital and community care service in their areas
- directly commissioning certain types of care, including primary care in some areas, dental care, treatments for rare conditions, and some public health services (such as immunizations)6
- working toward objectives in the annual mandate from the Secretary of State for Health, which include both efficiency and health goals
- setting the strategic direction of health information technology, including the development of online services to book appointments and the setting of quality standards for electronic medical record-keeping and prescribing.
The government owns the hospitals and providers of NHS care, including ambulance services, mental health services, district nursing, and other community services. These providers are called NHS trusts.
Other important public agencies involved in health care governance include:
- NHS Improvement, which licenses all providers of NHS-funded care and may investigate potential breaches of NHS cooperation and competition rules, as well as mergers involving NHS foundation trusts
- the Care Quality Commission, which ensures basic standards of safety and quality by registering providers and monitoring the achievement of care standards
- the National Institute for Health and Care Excellence, which sets guidelines for clinically effective treatments and appraises new health technologies for their efficacy and cost-effectiveness
- Health Education England, which plans the NHS workforce.
Role of public health insurance: In 2016, the U.K. spent 9.8 percent of GDP on health care; public expenditures, mainly related to the NHS, accounted for 79.4 percent of this amount.7 The majority of NHS funding comes from general taxes, and a smaller proportion (20%) comes from national insurance, which is a payroll tax paid by employees and employers. The NHS also receives income from copayments and people using NHS services as private patients.
Role of private health insurance: In 2015, an estimated 10.5 percent of the U.K. population had private voluntary health insurance, with nearly 4 million policies held at the beginning of 2015.8In 2016, voluntary private health insurance accounted for 3.3 percent of total health expenditures.9
Some private insurance is offered by employers, but individuals can also purchase policies. Private insurance offers more rapid access to care, choice of specialists, and better amenities, especially for elective hospital procedures; however, most policies exclude mental health, maternity services, emergency care, and general practice.10 According to a 2014 investigation, four insurers account for 87.5 percent of the private insurance market, with small companies making up the rest.11
Services covered: The precise scope of services covered by the NHS is not defined in statute or by legislation, and there is no absolute right for patients to receive a particular treatment. However, the statutory duty of the Secretary for Health is to ensure comprehensive coverage.
In practice, the NHS provides or pays for the following:
- preventive services, including screenings, immunizations, and vaccination programs
- inpatient and outpatient hospital care
- maternity care
- physician services
- inpatient and outpatient drugs
- clinically necessary dental care
- some eye care
- mental health care, including some care for those with learning disabilities
- palliative care
- some long-term care
- rehabilitation, including physiotherapy (such as after-stroke care)
- home visits by community-based nurses
- wheelchairs, hearing aids, and other assistive devices for those assessed as needing them.
The volume and scope of these services are generally a matter for local decision-making by CCGs.
Cost-sharing and out-of-pocket spending: The NHS has very limited cost-sharing arrangements for publicly covered services. Services are free at the point of use for outpatient and inpatient hospital services. Out-of-pocket payments for GP visits apply only to certain services, such as the provision of certificates for insurance purposes and travel vaccinations. NHS screening and vaccination programs are not subject to copayments.
Outpatient prescription drugs are subject to a copayment of GBP 8.80 (USD 12.50) per prescription. Drugs prescribed in NHS hospitals are free.
NHS dentistry services are subject to copayments of up to GBP 256.50 (USD 365.00) per course of treatment.12 These charges are set nationally by the Department of Health.
Out-of-pocket health expenditures by households accounted for 15 percent of total expenditures in the U.K. in 2016. Also in 2016, the largest portion of out-of-pocket spending (37%) was on long-term care services, including residential care, followed by 35 percent for medical goods (including pharmaceuticals).13
Safety nets: In 2016, 89 percent of prescriptions in England were dispensed free of charge.14 People who are exempt from prescription drug copayments include:
- children age 15 and under
- full-time students ages 16 to 18
- people age 60 or older
- people with low incomes
- pregnant women and women who have given birth in the past 12 months
- people with cancer and certain other long-term conditions or disabilities.
Patients who need large amounts of prescription drugs can buy prepayment certificates costing GBP 29.10 (USD 41.40) for three months and GBP 104 (USD 148) for 12 months. Users incur no further charges for the duration of the certificate, regardless of how many prescriptions they need.
Other safety nets include assistance with dental and vision care. Young people, students, pregnant and recently pregnant women, prisoners, and those with low incomes are not liable for dental copayments. Vision tests are free for young people, those over age 60, and people with low incomes. In addition, young people and those with low incomes can obtain financial support to meet the cost of corrective lenses.
Transportation costs to and from provider sites also are covered for people who qualify for the NHS Low Income Scheme.
Universal coverage was achieved over seven decades by extending statutory health insurance (SHI) to all employees (in 1945), retirees (in 1945), the self-employed (in 1966), and the unemployed (in 2000). In 2000, the Couverture maladie universelle (Universal Health Coverage), or CMU, was created for residents not eligible for SHI, although the program required yearly renewals and entitlement changes whenever a beneficiary’s professional or family situation changed. After the implementation of CMU, fewer than 1 percent of residents were left without baseline coverage.
In January 2016, SHI eligibility was universally granted under the Protection universelle maladie (Universal Health Protection law), or PUMa, to fill in the few remaining coverage gaps. The law also replaced and simplified the existing system by providing systematic coverage to all French residents. It merged coverage for persons previously covered by the Universal Health Coverage and immigrants covered by the state-sponsored health insurance.1
Role of government: The provision of health care in France is a national responsibility. The Ministry of Social Affairs, Health, and Women’s Rights is responsible for defining the national health strategy. It sets and implements government policy for public health as well as the organization and financing of the health care system.
Over the past two decades, the state has been increasingly involved in controlling health expenditures funded by SHI.2 It regulates roughly 75 percent of health care expenditures on the basis of the overall framework established by Parliament. The central government allocates budgeted expenditures among different sectors (hospitals, ambulatory care, mental health, and services for disabled residents) and regions.
The Ministry of Social Affairs, Health, and Women’s Rights is represented in the regions by the Regional Health Agencies, which are responsible for coordinating population health and health care, including prevention and care delivery, public health, and social care.
Other key government agencies include:
- The French Health Products Safety Agency, which oversees the safety of health products, from manufacturing to marketing.
- The Agency for Information on Hospital Care, which manages the information systematically collected from all hospital admissions and used for hospital planning and financing.
- The National Agency for the Quality Assessment of Health and Social Care Organizations, which promotes patient rights and develops preventive measures to avoid mistreatment, particularly in vulnerable populations such as the elderly and disabled, children, adolescents, and socially marginalized people. The agency also produces practice guidelines for the health and social care sector and evaluates organizations and services.
- The National Health Authority, the main health technology assessment body. In addition to assessing drugs, medical devices, and procedures, the agency publishes guidelines, accreditates health care organizations, and handles certification of doctors.
- The French Agency for numerical health (ASIP Santé), which seeks to expand the uptake and interoperability of existing health information systems.
- The Public Health Agency (Santé publique France), created in 2016 to protect population health. It conducts epidemiological surveys, scans for health threats, and pursues health protection and promotion efforts.
Role of public health insurance: Total health expenditures constituted 11.5 percent of GDP in 2017, which amounted to EUR 266 billion (USD 337 billion); 77 percent of those expenditures were publicly financed.3,4
SHI financing is supplied as follows5,6:
- Payroll taxes provide 53 percent of funding, with employers paying 80 percent of the tax and employees paying the rest; contributions are calculated from the actual salaries, capped at EUR 3,311 (USD 4,191) per month.
- A national earmarked income tax contributes 34 percent of funding.
- Taxes levied on tobacco and alcohol, the pharmaceutical industry, and voluntary health insurance (VHI) companies provide 12 percent of funding.
- State subsidies account for 1 percent of funding.
Coverage is compulsory, and is provided to all residents by noncompetitive statutory health insurance funds; historically, there have been 42 funds. Annual contributions are determined by Parliament. The SHI scheme in which workers enroll is based upon the type of employment. Unemployed persons are covered for one year after job termination by the SHI scheme of their employer and then by the universal health coverage law. Citizens can opt out of SHI only in rare cases, such as when they are employed by foreign companies.
The state finances health services for undocumented immigrants who have applied for residence. Visitors from elsewhere in the European Union (EU) are covered by an EU insurance card. Non-EU visitors are covered for emergency care only.
Role of private health insurance: Most voluntary health insurance (VHI) is complementary, covering mainly copayments and balance billing, as well as vision and dental care, which are minimally covered by SHI.
Complementary insurance is provided mainly by not-for-profit, employment-based associations or institutes. Private for-profit companies offer both supplementary and complementary health insurance, but only for a limited list of services. Voluntary health insurance finances 13.5 percent of total health expenditures.7 Ninety-five percent of the population is covered by VHI, either through employers or via means-tested vouchers (see more under “Safety nets,” below). As of 2016, all employees benefit from employer-sponsored VHI, for which employees pay at least 50 percent of the cost.
The extent of coverage varies widely, but all VHI contracts cover the difference between the SHI reimbursement rate and the official fee on the national fee schedule. Coverage of balance billing is also commonly offered.
In 2013, standards for employer-sponsored VHI were established by law to reduce inequities stemming from variations in access and quality.
Services covered: Covered benefits under SHI are defined at the national level by the Ministry of Social Affairs, Health, and Women’s Rights and the SHI funds, which are grouped under the National Union of Health Insurance Funds, or UNCAM, an umbrella organization. SHI covers the following:
- hospital care
- treatment in public or private rehabilitation or physiotherapy institutions
- outpatient care provided by general practitioners, specialists, dentists, physical therapists, and midwives
- all maternity care services, from the 12th week of pregnancy through six months after delivery
- newborn care and children’s preventive health care up to age 4
- diagnostic services prescribed by doctors and carried out by laboratories and paramedical professionals
- prescription drugs
- medical appliances, including durable equipment such as wheelchairs and prostheses, that have been approved for reimbursement
- prescribed health care–related transportation and home care.
SHI also partially covers long-term hospice and mental health care and provides minimal coverage of vision care, hearing aids, and dental care.
In general, there is limited coverage of preventive care; however, there is full reimbursement for priority services — immunizations, mammograms, and colorectal cancer screenings, for example — as well as for preventive care for children and low-income populations.
Injection sites under the supervision of health professionals were legalized in 2015 for the treatment of especially vulnerable drug addicts; these are fully covered under SHI until 2021.8
Cost-sharing and out-of-pocket spending: There are no deductibles. Cost-sharing for primary and specialist care takes three forms: coinsurance, copayments, and balance billing. Some physicians are allowed to balance-bill above the national fee schedule; authorization is based upon the duration of their hospital residency.
In 2015, total out-of-pocket spending made up 7 percent of total health expenditures (excluding the portion covered by supplementary insurance). This share has been decreasing in recent years, probably because of an agreement signed between physicians’ unions and the government to cap balance billing at twice the official fee. This contract also offers patients partial reimbursement of balance billing through SHI and reduced social contributions for physicians.
Most out-of-pocket spending is for dental and vision services. Official fees for these services are very low, no more than a few euros for glasses or hearing aids, and the maximum fee for dentures is EUR 200 (USD 253). But providers commonly balance-bill for these services at more than 10 times the official fee. However, the share of out-of-pocket spending on dental and optical services has been decreasing because of higher voluntary health coverage for these services.
At the same time, out-of-pocket expenditures on drugs have been steadily growing because more prescription drugs are being taken off the national formulary. The number of over-the-counter drugs has also risen.
The table below lists copayments for various services. Coinsurance rates are applied to all health services and drugs listed in the benefit package and vary by:
- Type of care: 20 percent for inpatient stays, 30 percent for outpatient doctor and dentist visits.
- Effectiveness of prescription drugs: highly effective drugs like insulin carry no coinsurance, while rates for all other drugs range from 15 percent to 100 percent, depending on the drug’s therapeutic value, whether patients seek a referral from their primary care provider, and whether they seek specialist care or treatments directly without a referral.
Hospital coinsurance applies only to the first 31 days in hospital, and some surgical interventions are exempt; there are no caps on other coinsurance.
Safety nets: People with low incomes are entitled to free or discounted health insurance, free vision care, and free dental care. Individuals are considered low-income if they make EUR 8,723 (USD 11,040) or less per year. For households, the qualifying income level increases with each member. The total number of low-income beneficiaries is estimated at around 9 percent of the population, with 6 percent receiving means-tested vouchers for VHI and 3 percent getting free state-sponsored coverage.
Chancellor Otto von Bismarck's Health Insurance Act of 1883 established the first social health insurance system in the world. At the beginning, health insurance coverage was restricted to blue-collar workers. In 1885, 10 percent of the population was insured and entitled to cash benefits in case of illness (50% of wages for a maximum of 13 weeks), death, or childbirth. While initially limited, coverage gradually expanded. The final step toward universal health coverage occurred in 2007, when health insurance, either statutory or private, was mandated for all citizens and permanent residents. Today’s system provides coverage for the entire population, along with a generous benefit package.
Health insurance is provided by two subsystems: statutory health insurance (SHI), consisting of competing, not-for-profit, nongovernmental health insurance plans known as sickness funds; and private health insurance.
Long-term care services are covered separately under Germany’s mandatory, statutory long-term care insurance (LTCI).
Unlike those in many other countries, sickness funds and private health insurers, as well as long-term care insurers, use the same providers. In other words, hospitals and physicians treat all patients regardless of whether they have SHI or private insurance.
Role of government: The German health care system is notable for the sharing of decision-making powers among the federal and state governments and self-regulated organizations of payers and providers (see exhibit).
Within Germany’s legal framework, the federal government has wide-ranging regulatory power over health care but is not directly involved in care delivery. The Federal Joint Committee, which is supervised by the Federal Ministry of Health, determines the services to be covered by sickness funds. To the extent possible, coverage decisions are based on evidence from comparative-effectiveness reviews and health technology (benefit-risk) assessments.
The Federal Joint Committee also sets quality measures for providers and regulates ambulatory care capacity (the number of SHI-contracted physicians practicing), using needs-based population–physician ratios.
The Federal Joint Committee has 13 voting members: five representatives from associations of sickness funds, five from associations of providers, and three unaffiliated members. Five patient representatives have an advisory role but no vote. However, representatives of patient organizations have the right to participate in other decision-making bodies, including subcommittees of the Federal Joint Committee.
The Federal Association of Sickness Funds works with the Federal Association of Statutory Health Insurance Physicians and the German Hospital Federation to develop the ambulatory care fee schedule for sickness funds and the diagnosis-related group (DRG) catalog, which are then adopted by bilateral joint committees. Germany’s state governments also play an important administrative role. The 16 state governments determine hospital capacity and finance hospital investments. States also supervise public health services.
Regional associations of SHI-contracted physicians are required by law to guarantee the local availability of ambulatory services for all specialties in urban and rural areas. These regional associations also negotiate ambulatory physicians’ fee schedules with sickness funds.
Role of public health insurance: In 2017, total health expenditures made up 11.5 percent of the gross domestic product (GDP). Of this health spending, 74 percent was publicly funded, and most of that spending (57% of total) went toward SHI.
About 88 percent of the population receives primary coverage through sickness funds, and 11 percent through private insurance. There were 109 sickness funds in January 2019.1
As of 2019, all employed citizens (and other groups such as pensioners) earning less than EUR 60,750 (USD77,985) per year are mandatorily covered by SHI.2 Individuals whose gross wages exceed the threshold, as well as the self-employed who were previously covered by SHI, can elect to remain in the publicly financed scheme (as 75% do) or to purchase substitutive private health insurance. Civil servants are exempt from SHI; their private insurance costs are partly refunded by their employer. Military members, police, and other public-sector employees are covered under small programs that are separate from SHI. Visitors are not covered through German SHI. Refugees and undocumented immigrants are covered by social security in cases of acute illness and pain, as well as pregnancy and childbirth.
Sickness funds are financed through compulsory wage contributions levied as a percentage of gross wages up to a ceiling. Dependents (nonearning spouses and children) are covered free of charge. Since 2016, the legally set uniform contribution rate has been 14.6 percent of gross wages, shared equally by the employer and employees. As of 2019, earnings above EUR 54,450 (USD 69,897) per year are exempt from contribution.
The wage contributions are centrally pooled in a health fund (Gesundheitsfonds) and reallocated to individual sickness funds. A risk-adjusted capitation formula is used, accounting for age, sex, and morbidity from 80 chronic and serious illnesses.
In addition to compulsory wage contributions, a supplementary, income-dependent contribution is paid directly to the sickness funds, the rate of which is determined by the fund.3 For 2019, the average supplementary contribution rate is estimated at 1.0 percent.4
Role of private health insurance: In 2017, private health insurance accounted for 8.4 percent of total health expenditures.5 This includes substitutive coverage purchased by individuals who are exempt from or can opt out of SHI (such as higher-income individuals) as well as supplementary policies bought by sickness fund enrollees.
In 2017, 8.75 million people were covered through substitutive private health insurance.6 In June 2018, there were 41 substitutive private health insurance companies in Germany, of which 25 were for profit.7
The privately insured pay a risk-related premium, with separate premiums for dependents; risk is assessed only on entry, and contracts are based on lifetime underwriting. Private health insurance is especially attractive for young people with good incomes, as insurers may offer them contracts with a more extensive range of services and lower premiums.
For sickness fund enrollees, private insurance plays a mixed complementary and supplementary role, covering minor benefits not covered by SHI, including some copayments (like for dental care) and private hospital rooms.
Private health insurance is regulated by the Ministry of Health and the Federal Financial Supervisory Authority to ensure that the insured do not face large premium increases as they age and are not overburdened by premiums if their income decreases. The federal government determines provider fees under substitutive, complementary, and supplementary private insurance through a fee schedule. These fees tend to be higher than SHI fees. There are no government subsidies for private insurance.
Services covered: SHI covers the following:
- Preventive services, including regular dental checkups, child checkups, basic immunizations, chronic disease checkups, and cancer screenings at certain ages
- Inpatient and outpatient hospital care
- Physician services
- Mental health care
- Dental care
- Physical therapy
- Prescription drugs, except for those explicitly excluded by law (mainly so-called lifestyle drugs like appetite suppressants) and those excluded following an unfavorable benefit-risk assessment
- Medical aids
- Hospice and palliative care
- Maternity care
- Sick leave compensation.
(See also the “ Long-term care and social supports” section for long-term care benefits.)
This broad framework for SHI benefits is defined by law; however, specifics are determined by the Federal Joint Committee.
Private benefit packages purchased by higher-income earners who opt out of SHI may be more extensive.
Cost-sharing and out-of-pocket spending: Out-of-pocket spending accounted for 13.5 percent of total health spending in 2017, and most individual spending went to nursing homes, pharmaceuticals, and medical aids.8
Copayments are determined by federal legislation and apply at the national level (see table below).
To compete for patients, sickness funds offer a range of deductibles and no-claims bonuses. Preventive services do not count toward the deductible, and there are no copayments for recommended preventive services (such as cancer screenings at certain ages).
Physicians who contract with sickness funds are not allowed to charge above the fee schedule for services in the SHI benefit catalogue. However, a list of individual health services outside the comprehensive range of coverage may be offered for a fee to patients paying out of pocket.
Safety nets: The unemployed contribute to SHI in proportion to their unemployment entitlements. For the long-term unemployed, the government contributes on their behalf. In addition, copayment caps and exemptions (see table above) help reduce the out-of-pocket burden on Germans.
The constitution of India obliges the government to ensure the “right to health” for all.1 Each state is required to provide free universal access to health care services. However, health care in India has been chronically underfunded.
Historically, there have been several government-funded health insurance schemes intended to improve coverage for specific population groups, with variations across states. One important scheme aimed at reducing financial catastrophe and vulnerability for lower-income populations is the National Health Insurance Program (Rashtriya Swasthya Bima Yojana, or RSBY), launched in 2008. As of 2016, some 41 million families were enrolled in RSBY.2 However, evidence indicates that the scheme has not significantly reduced out-of-pocket spending. It is now being subsumed under the PM-JAY.
With ineffective public insurance schemes and the low uptake of commercial insurance, only around 37 percent of the population were covered by any form of health coverage in 2017–2018.3 Further systemic barriers to access include long wait times in hospitals, the perceived low quality of public health services, and substantial workforce and infrastructure shortfalls.4
In March 2018, the central government approved the implementation of PM-JAY. This flagship public health initiative has been internationally recognized as a significant step toward achieving universal coverage in India.5 The initiative offers hospital coverage for the 40 percent of the country’s population that is poor or low-income. The other important initiative is to bolster preventive and promotive health care services by revamping existing primary health facilities into Health and Wellness Centres (see “Primary care,” below).
Role of government: Responsibility for the governance, financing, and operation of the health system is divided between the central and state governments.
At the federal level, the Ministry of Health and Family Welfare has regulatory power over the majority of health policy decisions but is not directly involved in health care delivery. The ministry comprises two departments:
- The Department of Health and Family Welfare is responsible for organizing and delivering all national health programs, with each program headed by its own administrative body.
- The Department of Health Research is responsible for promotion of health and clinical research, development of health research and ethics guidelines, outbreak investigations, and provision of advanced research training and grants for such training.
In 2014, the government established the federal Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy. It develops and promotes research in alternative medicine practices.
At the state level, the Directorates of Health Services and the Departments of Health and Family Welfare are responsible for organizing and delivering health care services to their populations. These include all medical care, from primary care and pharmacies to secondary and tertiary hospital care. These state bodies are also responsible for the following:
- management and monitoring of the health care workforce
- provision of federally funded national health programs
- collection of health information and statistics
- control of food and drug quality
- supervision of local health care entities and organizations
- promotion of alternative medicine practices.
Given that states are independently responsible for health care activities, there is significant nationwide variation in service delivery models, insurance coverage, availability, and access.
Some initiatives are governed and/or financed jointly by the central and state governments, such as the National Health Mission, a family welfare and population control initiative.
At the district level, Panchayati Raj (local governance) institutions are responsible for grassroots governance and administration in rural villages. These government bodies play a significant role in establishing primary health centers, and contribute to various social policies in such areas as education, agriculture, and transportation.6
Role of public health insurance: Total public and private health expenditures as a percentage of GDP are estimated at 3.9 percent, significantly lower than the world average of 9.9 percent.7 The public sector accounts for approximately one-quarter of health expenditures.
There are various public insurance schemes, including RSBY, which provides hospital coverage for most diseases and pre-existing health conditions for individuals living below the poverty line (with a family cap of five members). Outpatient care, primary care, and high-level tertiary care are not included.
The new National Health Protection Scheme is for individuals in the bottom two income quintiles. This scheme provides INR 500,000 (USD 7,007) per family per year to cover secondary and tertiary health services, from inpatient to post-hospitalization care.8 Eligibility is based on a household’s level of deprivation as defined by the Socio-Economic Caste Census. The scheme extends coverage to approximately 100 million poor and vulnerable families. Beneficiaries are auto-enrolled in the system and, therefore, are able to obtain benefits as cashless transactions.
Funding for the public insurance schemes is divided between the central and state governments. For instance, most states are contributing a 40 percent share to the cost of the National Health Protection Scheme, with the central government providing the remaining 60 percent.
Funding for the National Health Protection Scheme has been allocated under the existing budget for the RSBY, which has doubled from 2018 to accommodate expanding public insurance costs.9 To further support these initiatives, the cess (levy) on income tax was increased from 3 percent to 4 percent, to collect an estimated INR 110 billion (USD 1.54 billion) annually.10
The states also run their own health schemes, mostly along the lines of RSBY. In addition, public sector undertakings (state-owned enterprises) and autonomous government bodies like central and state universities offer health coverage to their employees.
Another important health coverage scheme is the Central Government Health Scheme, organized and run by the Ministry of Health and Family Welfare for current and retired central government employees and their dependents.11 There are no income or wage requirements to be eligible. Coverage includes health care services for allopathic, homeopathic, and alternative medicine treatments.12 Approximately 3.6 million beneficiaries were registered under this scheme as of late 2019.13 Similar schemes exist for railway and defense employees.
In 2013, the RSBY was extended to mine workers, while certain groups of plantation workers were subsumed under the Aam Admi Bima Yojana (AABY), a government social security scheme administered through the Life Insurance Corporation of India that provides death and disability coverage from ages 18 to 59.
An important social health insurance scheme is the Employees’ State Insurance Scheme, which is organized by the Ministry of Labour and Employment for the workforces of companies with 10 or more employees. Previously, only workers employed by factories were eligible, but the scheme has been extended to companies in other industries, such as hotels, restaurants, transportation companies, newspaper establishments, and cinemas. This is India’s only true health insurance scheme to which both employees and employers contribute. Currently, employees contribute 0.75 percent of their wages, while employers contribute 3.25 percent.14 To be eligible for Employee’s State Insurance, a worker must be earning INR 21,000 (USD 294) per month.15 Coverage for workers and their families includes maternity care, as well as disability and death benefits for employment-related injuries. State governments contribute one-eighth of the medical benefit expenditures, up to an annual per-capita ceiling of INR 1,500 (USD 21). The scheme has approximately 133 million beneficiaries.16
Many public hospitalization schemes partner with public and private insurance companies to run the plans. The PM-JAY has offered private sector hospitals incentives to increase supply in underserved areas by providing access to funding and land for hospital construction in urban-rural and rural cities.17
Role of private health insurance: Thirty-six percent of insured individuals in India have private coverage, which covers only hospitalizations.
The Insurance Regulatory and Development Authority Act of 1999 allowed for private companies to enter the health insurance market.18 The 1999 act also allowed for individuals who are not eligible for sponsored insurance schemes to purchase a private policy. Private insurance now accounts for nearly 4.4 percent of total current health expenditures.19
Services covered: Services covered depend on the insurance scheme. Under the National Health Protection Scheme, secondary and tertiary care are covered, but not outpatient care. The Central Government Health Scheme and Employees’ State Insurance Corporation cover all types of care, including outpatient care and drugs. Under other publicly subsidized insurance coverage, all secondary, tertiary, pre-hospital, and post-hospitalization treatment are covered.
Cost-sharing and out-of-pocket spending: Citizens can get free care in public health facilities with no deductibles, co-payments, or coinsurance.
However, because government funding for health care is limited and there are accessibility issues at the existing facilities, a significant portion of outpatient and inpatient care is delivered at private, high-priced facilities, with costs typically paid out-of-pocket.20 As a result, out-of-pocket payments have been the primary means of funding health care, accounting for 65 percent of total health expenditures in 2015–2016.21
A significant proportion of the population faces impoverishment due to lack of insurance and high out-of-pocket expenditures. An estimated 8 percent of the population is being pushed below the poverty line as a result of high out-of-pocket payments.22
The launch of the National Health Protection Scheme aims to insulate lower-income households from high health care costs by offering free care to beneficiaries in private facilities as well as public facilities.
However, the impact of the scheme will depend on demand as well as supply factors, like the availability of medicines and personnel, health infrastructure, and service quality. It will also depend on how hospitals are reimbursed and on their willingness to offer quality services at the quoted rates.
Safety nets: The various government health coverage programs offer safety nets to different populations, with the government bearing the cost of subsidies. For example, in RSBY and now the National Health Protection Scheme, the federal and state governments share the cost of premiums for each beneficiary, in addition to the cost of health services up to the coverage limit.
Since 1995, Israel’s National Health Insurance (NHI) law has ensured universal coverage for citizens and permanent residents. As the law states, "Health insurance…shall be based on principles of justice, equality and mutual assistance." Under this commitment, every resident is entitled to health care services.
Residents are free to choose one of four competing nonprofit health plans that must cover anyone who applies. Every resident has a right to receive all services included in the benefit basket that is mandated by the government, subject to medical discretion. While residents also have the right to receive services at a reasonable quality level, within a reasonable period of time, and at a reasonable distance from their home, no formal definition of “reasonable” exists, and there is no penalty for health plans that fail to comply.
Some populations are excluded: soldiers, who receive health care directly from the army; inmates, who receive care from the Israel Prison Service; documented and undocumented foreign workers, whom employers are required to enroll in private insurance programs; and undocumented migrants, temporary residents, and tourists.2
Role of government: The national government, through the Ministry of Health, is responsible for population health and the overall functioning of the health care system. It supervises and works with the NHI health plans and owns and operates a large network of maternal and child health centers, about half of the nation’s acute care bed capacity, and about 80 percent of its psychiatric bed capacity.3 In addition to financing insurance, the national government funds public-health services and is directly responsible for the provision and funding of certain other health services, including prenatal and preventive care, infant developmental tests, communicable disease surveillance, screenings, and institutional long-term care.
Local governments have limited involvement in health care provision. Accordingly, nearly all governmental health functions are organized by the national Ministry of Health, which comprises a network of regional and district health offices.
Various advisory bodies, including the following, counsel the Ministry of Health and handle specific responsibilities:
- The National Health Council, a public advisory council, advises on prominent health policy issues.
- The Benefits Package Committee provides guidance on the prioritization of new technologies for inclusion in the NHI benefit package and carries out health technology assessments for new medications.
- Various national councils provide external professional input in specific areas, such as trauma care, mental health, and women’s health.
- The Ministry of Finance’s Insurance and Capital Markets Division regulates commercial voluntary health insurance.
- An ombudsman’s office helps citizens realize their rights under the NHI law. In addition, there are various nongovernmental patient advocacy organizations, many of which focus on particular diseases.
- The Scientific Council of the Israel Medical Association is responsible for specialty provider certification programs and examinations, in coordination with the Ministry of Health.
- The Council for Higher Education is responsible for the authorization, certification, and funding of all university degree programs, including the training of health care professionals.
- A joint Ministry of Health – Ministry of Finance committee sets the fees for hospitals, other providers, and services. These ministries are also engaged in cost-control efforts, but responsibility for cost containment is distributed over a number of different departments.
The Ministry of Health also has units that monitor quality and patient safety in hospitals and additional settings, provide national leadership in health information technology, promote health equity, and address issues of competition within health care.
Role of public health insurance: In 2017, national health expenditures accounted for 7.4 percent of GDP, a figure that has remained stable during the last two decades. In 2017, 63 percent of health expenditures were publicly financed, a share that is one of the lowest among Organisation for Economic Co-operation and Development (OECD) countries.
Israel’s NHI system is funded primarily through an earmarked, income-related health tax (5% of income for individuals age 22 and older) in combination with general government revenues, which are funded primarily through progressive income taxation paid by individuals. Married women, children, and all those who are excluded from the NHI (such as soldiers) are exempt from the health tax.
The government distributes the NHI budget among the four health plans primarily through a capitation that accounts for sex, age, geographic distribution of their members and five chronic, expensive-to-treat diseases.
Role of private health insurance: Private, voluntary health insurance financed 14 percent of national health expenditures in 2016.4 Residents can obtain voluntary health insurance from the four NHI nonprofit plans as well as from for-profit commercial plans. The NHI plans cannot reject applicants, and premiums are based on age only. Commercial private plans tend to be more comprehensive, more individually tailored, and more expensive, and can be purchased by individuals or groups, such as employers, unions, or kibbutzim.
Nearly all individuals purchase private insurance from either the NHI plans or commercial insurers, or both. In 2016, 84 percent of Israel’s adult population was enrolled in an NIH private insurance plan, and 57 percent were enrolled in a commercial private insurance plan.5
Voluntary health insurance plays a complementary role, covering benefits excluded from the NHI scheme (dental care for adults, certain medications, alternative medicines), as well as a supplementary role, expanding access to NHI-covered benefits, offering access to private providers, and providing improved amenities and faster access to care. The high number of those with voluntary health insurance coverage reflects a general lack of confidence in the NHI system’s capacity to fully fund and deliver all services needed in cases of severe illness.
Services covered: The mandated NHI benefit package includes the following:
- hospital care
- primary and specialty care
- prescription drugs
- certain preventive services
- mental health care
- dental care for children and the elderly aged 75+
- diagnostic exams
- maternity care
- allied medical care (physiotherapy, occupational therapy, nutrition, speech therapy)
- some durable medical equipment (wheelchairs, orthopedic aids)
- limited coverage of palliative and hospice services.6
Dental care for adults, optometry, and hearing aids are excluded.
Means-tested institutional long-term care, infant developmental screenings and vaccinations, and postpartum care like breastfeeding guidance are covered by the Ministry of Health, but separately from NHI.
Cost-sharing and out-of-pocket spending: In 2016, out-of-pocket spending accounted for 22 percent of national health expenditures.7 Most of this was for voluntary health insurance (38%), adult dental care (22.5%), and pharmaceuticals (15%). The remainder was for other services not included in the NHI benefit package, including vision care and medical equipment, as well as cost-sharing for NHI-covered services.
NHI health plans are allowed to impose user charges for certain services. These include a flat quarterly copayment rate for visits to specialists and allied medical professionals and for imaging diagnostic exams; a user charge for after-hours emergency care in the community; and coinsurance for pharmaceuticals (see table below). User charges, which are regulated by the Ministry of Health, constituted about 6.5 percent of health plan income in 2016. There are no copayments for primary care visits, preventive care, cancer screenings, or hospital admissions. There are also no quarterly or annual deductibles with NHI coverage.
Safety nets: Safety nets include an annual cap on the health tax at NIS 43,370 (USD 11,565). In addition, individuals with low incomes (60% of average income or less) pay a reduced health tax rate of 3 percent, compared to 5 percent paid by individuals with higher incomes. The unemployed and others without income pay a minimum flat health tax of approximately NIS 100 (USD 27) per month.8
Israel also has caps on user charges and discounts for older adults, the chronically ill, and other vulnerable populations, as shown in the table below.
Universal coverage is provided through Italy’s National Health Service (Servizio sanitario nazionale, or SSN), established through legislation in 1978. The SSN automatically covers all citizens and legal foreign residents. Since 1998, undocumented immigrants have had access to urgent and essential services. Temporary visitors are responsible for the costs of any health services they receive.
Role of government: The organization and delivery of health services is decentralized. Nineteen regions and two autonomous provinces are responsible for delivering care through 100 local health units, which deliver primary care, hospital care, outpatient specialist care, public health care, and health services related to social care. Regions enjoy significant autonomy in determining the macro structure of their health systems. The local health units each have a general manager, who is appointed by the regional governor.
As specified in Italy’s constitution, national health policies and priorities are a responsibility of the central government. The central government also determines annual SSN funding and controls the allocation of resources to each region. Health agencies and ministries include the following:
- The Ministry of Health, which oversees health care planning (such as determining the essential benefits package), health system ethics, the supply of health professionals, information systems, and other areas
- The National Committee for Medical Devices, which develops cost-benefit analyses and determines reference prices for medical devices
- The Agency for Regional Health Services, the sole institution responsible for conducting comparative-effectiveness analyses, which is accountable to the regions and to the Ministry of Health
- The National Pharmaceutical Agency, which governs prescription drug pricing, reimbursement policies, and all other matters related to the pharmaceutical industry.1
Role of public health insurance: Public financing accounted for 74.2 percent of total health spending in 2018, with total expenditures standing at 8.8 percent of GDP.2 The public system is financed primarily through two mechanisms3:
- A corporate tax (approximately 18.6% of 2018 total funding), which is pooled nationally and allocated back to the regions. Corporate tax allocations are typically in proportion to a region’s contributions. There are large interregional variations in the corporate tax base, resulting in inequalities in financing.
- A fixed proportion of the national value-added tax revenue (approximately 60% of 2018 total funding) collected by the central government, which is redistributed to regions with insufficient resources to provide essential services.
The regions are allowed to generate their own additional revenue, leading to further interregional financing differences.
Local health units are funded mainly through capitated budgets.
Role of private health insurance: Since the SSN does not allow people to opt out of the system and seek only private care, substitutive insurance does not exist. But complementary and supplementary private health insurance play a limited role in the health system, accounting for roughly 1 percent of total spending in 2014.
Approximately 10 percent of the population have some form of voluntary health insurance, which covers services excluded under SSN essential benefits, offers a higher standard of comfort and privacy in hospital facilities, and affords wider choice among public and private providers. Some private health insurance policies also cover copayments for privately provided services or a daily rate of compensation during hospitalization.4 Tax benefits favor complementary insurance (insurance for copayments) over supplementary voluntary insurance (which covers the cost of health care services not included in the essential benefits package).
There are two types of private health insurance: corporate, for which companies cover employees and sometimes their families, and noncorporate, with individuals buying insurance for themselves or their families. Policies, either collective or individual, are supplied by for-profit and nonprofit organizations. The market comprises voluntary mutual insurance organizations and corporate and collective funds organized by employers or professional associations for their employees or members. Nonprofit organizations cover the majority of the insured.5
Services covered: The central government defines a national statutory benefits package offered to all residents in every region: the LEA (Livelli essenziali di assistenza). Covered benefits include:
- inpatient care
- preventive medicine
- outpatient specialist care
- maternity care
- home care
- primary care
- hospice care.
Durable medical equipment, long-term care, and other selected services are covered only for patients with certain medical conditions.
Regions can offer services not included in the national statutory benefits but must finance those services themselves.
Prescription drugs are divided into three tiers according to clinical effectiveness and, in part, cost-effectiveness:
- Tier 1 (Classe A) includes lifesaving drugs and treatments for chronic conditions and is covered in all cases.
- Tier 2 (Classe C) includes drugs for all other conditions and is not covered by the SSN.
- Tier 3 (Classe H) comprises drugs that can be delivered only in a hospital setting.
The three tiers are updated regularly by the National Pharmaceutical Agency in recognition of new clinical evidence. For some categories of drugs, therapeutic plans are mandated and prescriptions must follow clinical guidelines.
Dental care is generally not covered, except for children through age 16, vulnerable populations, and people in economic and emergency need.
Cost-sharing and out-of-pocket spending: Primary and inpatient care are free at the point of use. Most preventive screenings are also provided free of charge.
Procedures and specialist visits can be prescribed either by a general practitioner (GP) or by a specialist. Fees for visits range from EUR 12.91 (USD 17.91) for a follow-up visit) to EUR 20.66 (USD 28.65) for first encounters. Patients also make copayments for each prescribed procedure up to a ceiling determined by law — currently EUR 36.15 (USD 50.14).6
Patients are subject to copayments for some outpatient drugs (see table below). In addition, a EUR 25 (USD 35) copayment has been introduced for the “unnecessary” use of emergency services, but some regions have not enforced this copayment.
No other forms of deductible exist. Public and private providers under a contract with the SSN are not allowed to charge above scheduled fees.
In 2018, an estimated 23 percent of total health spending was paid out-of-pocket, mainly for drugs not covered by the public system and for dental care.7
Safety nets: All individuals with out-of-pocket payments over EUR 129 (USD 181) in a given year are eligible for a tax credit equal to roughly one-fifth of their spending.
Exemptions from cost-sharing are applied to children under age 6 and adults over age 65 who live in households with a gross income below a nationally defined threshold of approximately EUR 36,000 (USD 40,930). People with severe disabilities, as well as prisoners, are exempt from cost-sharing. In addition, people with rare or chronic diseases, including HIV, and pregnant women are exempt from cost-sharing for treatments related to their condition.
Japan’s statutory health insurance system (SHIS) covers 98.3 percent of the population, while the separate Public Social Assistance Program, for impoverished people, covers the remaining 1.7 percent.1,2 Citizens and resident noncitizens are required to enroll in an SHIS plan; undocumented immigrants and visitors are not covered.
The SHIS consists of two types of mandatory insurance:
- employment-based plans, which cover about 59 percent of the population
- residence-based insurance plans, which include Citizen Health Insurance plans for nonemployed individuals age 74 and under (27% of the population) and Health Insurance for the Elderly plans, which automatically cover all adults age 75 and older (12.7% of the population).
Each of Japan’s 47 prefectures, or regions, has its own residence-based insurance plan, and there are more than 1,400 employment-based plans.3
Role of government: The national and local governments are required by law to ensure a system that efficiently provides good-quality medical care. The national government regulates nearly all aspects of the SHIS. National government sets the SHIS fee schedule and gives subsidies to local governments (municipalities and prefectures), insurers, and providers. It also establishes and enforces detailed regulations for insurers and providers.
Japan’s prefectures implement national regulations, manage residence-based regional insurance (for example, by setting contributions and pool funds), and develop regional health care delivery networks with their own budgets and funds allocated by the national government. The more than 1,700 municipalities are responsible for organizing health promotion activities for their residents and assisting prefectures with the implementation of residence-based Citizen Health Insurance plans, for example, by collecting contributions and registering beneficiaries.4
Government agencies involved in health care include the following:
- the Ministry of Health, Labor and Welfare, which drafts policy documents and makes detailed regulations and rules once general policies are authorized
- the Social Security Council, which is in charge of developing national strategies on quality, safety, and cost control, and sets guidelines for determining provider fees
- the Central Social Insurance Medical Council, which defines the benefit package and fee schedule
- the Pharmaceutical and Medical Devices Agency, which reviews pharmaceuticals and medical devices for quality, efficacy, and safety
- the Central Social Insurance Medical Council, which sets the SHIS list of covered pharmaceuticals and their prices.5
Role of public health insurance: In 2015, estimated total health expenditures amounted to approximately 11 percent of GDP, of which 84 percent was publicly financed, mainly through the SHIS.6 Funding of health expenditures is provided by taxes (42%), mandatory individual contributions (42%), and out-of-pocket charges (14%).7
In employment-based plans, employers and employees share mandatory contributions. The contribution rates are about 10 percent of both monthly salaries and bonuses and are determined by an employee's income. Contribution rates are capped. In Tokyo, the maximum monthly salary contribution in 2018 was JPY 137,000 (USD 1,370) and the maximum contribution taken from bonuses was JPY 5,730,000 (USD 57,300).8,9,10 These contributions are tax-deductible, and vary between types of insurance funds and prefectures. For residence-based insurance plans, the national government funds a proportion of individuals’ mandatory contributions, as do prefectures and municipalities. The Japan Health Insurance Association, which insures employers and employees of small and medium-sized companies, and health insurance associations that insure large companies also contribute to Health Insurance for the Elderly plans. Finally, there are complex cross-subsidies among and within the different SHIP plans.11
The Public Social Assistance Program, separate from the SHIS, is paid through national and local budgets.
Role of private health insurance: Although the majority (more than 70%) of the population holds some form of secondary, voluntary private health insurance,12 private plans play only a supplementary or complementary role. Historically, private insurance developed as a supplement to life insurance. It provides additional income in case of sickness, usually as a lump sum or in daily payments over a defined period, to sick or hospitalized insured persons.
The number of supplementary medical insurance policies in force has gradually increased, from 23.8 million in 2010 to 36.8 million in 2017.13 The provision of privately funded health care has been limited to services such as orthodontics. Both for-profit and nonprofit organizations operate private health insurance.
Part of an individual’s life insurance premium and medical and long-term care insurance contributions can be deducted from taxable income.14 Employers may have collective contracts with insurance companies, lowering costs to employees.
Services covered: All SHIS plans provide the same benefits package, which is determined by the national government:
- hospital visits
- primary and specialty care
- mental health care
- approved prescription drugs
- home care services provided by medical institutions
- hospice care
- physical therapy
- most dental care.
The SHIS does not cover corrective lenses unless they’re prescribed by physicians for children up to age 9. Optometry services provided by nonphysicians also are not covered.
Although maternity care is generally not covered, the SHIS provides medical institutions with a lump-sum payment for childbirth services. In addition, local governments subsidize medical checkups for pregnant women.
Home care services provided by nonmedical institutions are covered by long-term care insurance (LTCI) (see “Long-term care and social supports” below).
Durable medical equipment prescribed by physicians (such as oxygen therapy equipment) is covered by SHIS plans. People with disabilities who need other equipment like hearing aids or wheelchairs receive government subsidies to help cover the cost.
Select preventive services, including some screenings and health education, are covered by SHIS plans, while cancer screenings are delivered by municipalities.
Cost-sharing and out-of-pocket spending: In 2015, out-of-pocket payments accounted for 14 percent of current health expenditures. There are no deductibles, but SHIS enrollees pay coinsurance and copayments.
SHIS enrollees have to pay 30 percent coinsurance for all health services and pharmaceuticals; young children and adults age 70 and older with lower incomes are exempt from coinsurance.
Small copayments are charged for primary care and specialty visits (see table). Residents also pay user charges for preventive services, such as cancer screenings, delivered by municipalities.
Providers are prohibited from balance billing or charging fees above the national fee schedule, except for some services specified by the Ministry of Health, Labor and Welfare, including experimental treatments, outpatient services of large multispecialty hospitals, after-hours services, and hospitalizations of 180 days or more.
Safety nets: In the SHIS, catastrophic coverage stipulates a monthly out-of-pocket threshold, which varies according to enrollee age and income. For example, the monthly maximum for people under age 70 with modest incomes is JPY 80,100 (USD 801); above this threshold, a 1 percent coinsurance rate applies. Low-income people do not pay more than JPY 35,400 (USD 354) a month.
Subsidies (mostly restricted to low-income households) further reduce the burden of cost-sharing for people with disabilities, mental illnesses, and specified chronic conditions.
In addition, there is an annual household health and long-term care out-of-pocket ceiling, which varies between JPY 340,000 (USD 3,400) and JPY 2.12 million (USD 21,200) per enrollee, according to income and age. Above this ceiling, all payments can be fully reimbursed.
People can deduct annual expenditures on health services and goods between JPY 100,000 (USD 1,000) and JPY 2 million (USD 20,000) from taxable income. In addition, expenditures for copayments, balance billing, and over-the-counter drugs are allowable as tax deductions.
Other safety nets for SHIS enrollees include the following:
- Enrollees in employment-based plans who are on parental leave are exempt from paying monthly mandatory salary contributions.
- Enrollees in Citizen Health Insurance plans who have relatively lower incomes (such as the unemployed, the self-employed, and retirees) and those with moderate incomes who face sharp, unexpected income reductions are eligible for reduced mandatory contributions.
- Reduced coinsurance rates apply to patients with one of the 306 designated long-term diseases if they use designated health care providers. The reduced rates vary by income.
- Approved providers are allowed to reduce coinsurance for low-income people through the Free/Lower Medical Care Program.
Low-income people in the Public Social Assistance Program do not incur any user charges.15
In the Netherlands, a national health insurance program was first rolled out in 1941, reflecting the German Bismarck model of public and private health insurers.1 Around 63 percent of the population was covered by public health insurance, while the more affluent could opt for private insurance or choose to remain uninsured.
At the turn of the century, concerns over inefficiencies and long waiting lists provided momentum for market-oriented reform based on the managed competition model proposed by American economist Alain C. Enthoven.2 The 2006 Health Insurance Act merged the traditional public and private insurance markets into one universal social health insurance program underpinned by private insurance and mandatory coverage.
All residents (and nonresidents who pay Dutch income tax) must purchase statutory health insurance from private insurers. Adults choose a policy on an individual basis (no family coverage), and children under 18 are then automatically covered. Insurers are required to accept all applicants, and enrollees have the right to change their insurer each year.
The uninsured are fined, and their insurance premiums may be levied directly from income. People who conscientiously object to insurance can opt out by making mandatory contributions into a health savings account. Active members of the armed forces (who are covered by the Ministry of Defense) are exempt.
Undocumented immigrants cannot purchase health insurance and have to pay for most treatments out-of-pocket (excluding acute care, obstetric services, and long-term care). However, some mechanisms are in place to reimburse costs that undocumented immigrants are unable to pay. Political asylum–seekers fall under a separate, limited insurance plan. Permanent residents living in the Netherlands for more than three months are obliged to purchase private insurance. Short-term visitors are required to purchase insurance for the duration of their visit if they are not covered through their home country.
Since 2011, the number of uninsured in the Netherlands has steadily declined. At the end of 2016, 23,000 people (less than 0.2% of the population) remained uninsured.
Role of government: The national government has overall responsibility for setting health care priorities; introducing legislative changes when necessary; and monitoring access, quality, and costs in the country’s market-based system.
The municipalities are responsible for overseeing some health care services, including preventive screenings and outpatient long-term services. The federal Ministry of Health’s role is to safeguard health care from a distance rather than managing it directly.
A number of arm’s-length (independent) agencies are responsible for setting operational priorities:
- At the national level, the Health Council advises government on evidence-based medicine, health care, public health, and environmental protection.
- The Medicines Evaluation Board oversees the efficacy, safety, and quality of medicines.
- The National Health Care Institute assesses new technologies for efficacy and cost-effectiveness, and advises the Ministry of Health on whether to include those technologies in the mandatory benefit package.
- The Dutch Health Care Authority (Nederlandse Zorgautoriteit) has primary responsibility for ensuring that the health insurance, health care purchasing, and care delivery markets all function appropriately.
- The Dutch Competition Authority (Autoriteit Consument en Markt) enforces antitrust laws among both insurers and providers.
- The Health Care Inspectorate supervises the quality, safety, and accessibility of care. Self-regulation by medical doctors is also an important aspect of the Dutch system.3
- Health information technology (IT) is not centralized in one body. The Union of Providers for Health Care Communication (Vereniging van Zorgaanbieders voor Zorgcommunicatie) is responsible for the exchange of data via an IT infrastructure.
Role of public health insurance: In 2016, the Netherlands spent 10.5 percent of its GDP on health care, and 81 percent of spending was collectively financed through a combination of earmarked payroll taxes paid by employers (46%), general taxation (22%), insurance premiums paid by individuals (21%), and copayments (11%).4
Statutory health insurance is financed partially through a nationally defined annual income tax at 6.9 percent of income up to EUR 54,614 (USD 69,989).5 The income tax accounts for 45 percent of funding.6
Insurance premiums for individuals, which are determined separately by each insurer, account for another 45 percent of funding. Each insurer sets a premium that applies to all of its enrollees, regardless of their age or health status. However, through employer collectives, lower premiums may be offered.
A government grant for children and adolescents under age 18 provides the remaining 5 percent of financing.
Income taxes and government grants are collected in a central health insurance fund and redistributed among insurers in accordance with a risk-adjusted capitation formula that considers age, gender, labor force status, region, and health risk (based mostly on past drug and hospital utilization).
Private, statutory insurers are expected to engage in strategic purchasing, and contracted providers are expected to compete on both quality and cost. There were 10 statutory insurers in 2018, but the insurance market is dominated by the four largest insurance conglomerates, which account for 90 percent of all enrollees. Currently, all insurers are mandated to operate as nonprofits.
Role of private health insurance: In addition to statutory coverage, most of the population (84%) purchases supplementary voluntary insurance covering a range of services not covered by statutory insurance, such as dental care, alternative medicine, physiotherapy, eyeglasses and lenses, and contraceptives, while also reducing copayments for nonformulary medicines.
Premiums for voluntary insurance are not regulated; insurers are allowed to screen applicants for risk factors. Nearly all of the insured purchase their voluntary benefits from the same (mostly nonprofit) insurer that provides their statutory health insurance.
People with voluntary coverage do not receive faster access to any type of care, nor do they have increased choice among specialists or hospitals. In 2016, voluntary insurance accounted for 7 percent of total health spending.7
Services covered: The government determines the statutory benefit package, and health insurers are legally required to provide the standard benefits. The mandatory benefit package includes:
- care provided by general practitioners (GPs)
- specialty care
- hospital care
- maternal care
- dental care up to age 18
- prescription drugs
- physiotherapy up to age 18
- home nursing care
- a limited number of health promotion programs, including those for smoking cessation and some weight management advice
- basic ambulatory mental health care for mild-to-moderate mental disorders
- specialized outpatient and inpatient mental care for complicated and severe mental disorders.
Some treatments, such as general physiotherapy, are only partially covered for some people with specific chronic conditions. Some elective procedures are excluded, such as cosmetic plastic surgery without a medical indication, dental care after age 18, and vision care without medical indication. A range of medical devices are covered, including hearing aids and orthopedic shoes, but wheelchairs and other walking aids are excluded.
Prevention and social supports are not covered by statutory health insurance but are financed through general taxation. The Public Health Act describes municipal responsibilities for national prevention programs, vaccinations, and infectious disease management. Municipalities can install additional prevention programs, such as healthy living and obesity reduction programs, but the provision of such services can vary widely from one municipality to another.
Long-term care is financed separately from statutory health insurance (see the long-term care section below).
Cost-sharing and out-of-pocket spending: In the statutory health insurance system, the main form of cost-sharing is a mandatory deductible, which was EUR 385 (USD 493) in 2019. In addition, consumers may pay a voluntary deductible of EUR 500 (USD 641), on top of the mandatory deductible, in exchange for a lower monthly premium. People pay the full cost of specialty and hospital care up to the deductible. The deductible covers a broad range of services, including hospital admissions, specialist services, and prescription drugs. GP care, preventive services (including most immunizations and breast cancer screenings), and children’s health care are provided for free.
Copayments, coinsurance, or direct payments may be required even after the deductible is met for some selected services, such as nonformulary medications, physiotherapy for adults, medical transportation, and medical devices. In addition, patients with restricted network plans who visit providers that do not have contracts with the insurer may be required to pay up to 25 percent of the cost of that out-of-network care.
Safety nets: In addition to providing free primary and pediatric care, the government offers means-tested subsidies (health care allowances) to help cover insurance premiums for low-income people. As of 2019, singles must have annual incomes under EUR 29,500 (USD 37,805), and households must have incomes under EUR 38,000 (USD 48,698).8
More than 5 million people (approximately 30% of the population) receive these allowances,9 which are set on a sliding, income-based scale, up to a maximum of EUR 99 (USD 127) per month for singles and EUR 192 (USD 246) per month for households.10
Beginning with the 1938 Social Security Act, a consensus developed in New Zealand that government has a fundamental role in providing for the population’s health care needs. Not long after that law’s passage, the government achieved its goal of universal health coverage. No citizen can be denied treatment in public hospitals, and all citizens have insurance through government-funded, universally accessible health services. In practice, however, coverage varies by income, need, location, and type of service.
Role of government: The national government plays a central role in setting the health care policy agenda and service requirements and in determining the publicly funded annual health budget. The government dominates all aspects of health care as the primary funder and supplier of health care; it also sets regulations and monitors compliance.
The government sets an annual overall budget and benefit package, based largely on political priorities and health needs. It also sets national requirements for publicly funded services, to be implemented by 20 geographically defined district health boards.
Responsibility for planning, purchasing, and providing health services, as well as disability support for those over age 65, lies with the district health boards, each of which comprises seven locally elected members and up to four members appointed by the minister of health.1 These boards pursue government objectives, targets, and service requirements while operating government-owned hospitals and health centers, providing community services, and purchasing services from nongovernment and private providers.
Because New Zealand’s health system is primarily public, government-funded and government-appointed entities dominate governance structures. Some operate at arm’s length from the central government, such as the Health and Disability Commissioner, which champions consumers’ rights in the health sector. Others are “crown agents,” funded by government, with their own boards, and are required to follow government policy. Key national entities are:
- The Ministry of Health, which has overall responsibility for the health and disability system, acts as the minister of health’s principal adviser on health policy, and maintains a role as funder, monitor, purchaser, and regulator of health and disability services.
- The Technology and Digital Services business unit, within the Ministry of Health, is responsible for implementing the government’s Digital Health Strategy and other e-health initiatives.
- The Capital Investment Committee, which is a Ministry of Health subcommittee, advises on matters relating to capital investment in the public health sector, in line with the government’s service plans.
- Health Workforce New Zealand leads and supports health and disability workforce training and development.
- NZ Health Partnerships, owned and supported by New Zealand’s 20 district health boards, is tasked with helping the boards pursue bulk procurement of medical equipment, devices, and services.
- The Pharmaceutical Management Agency of New Zealand assesses the effectiveness of drugs, distributes prescribing guidelines, and determines the inclusion of drugs on the national formulary.
- The Health Quality and Safety Commission is working toward New Zealand’s version of the Institute for Healthcare Improvement’s Triple Aim: improved quality, safety, and experience of care; improved health and equity for all populations; and better value for public health system resources.
- The Health Promotion Agency develops and enables health-promoting policy, initiatives, and environments.
- The Health Research Council invests in a broad range of research on issues important to New Zealand.
Role of public health insurance: All permanent residents have access to a broad range of services that are largely publicly financed through allocations from pooled general taxes, which are collected at the national level. One exception is treatments related to accidents, which are covered by a no-fault accident compensation scheme. Nonresidents, including tourists and undocumented immigrants, are charged the full cost of services by public health care providers.
Total health spending was 9 percent of GDP in 2017.2 Public spending accounted for 78.68 percent of total spending.
Role of private health insurance: Private health insurance is offered by a variety of organizations, from nonprofits to for-profit companies, and accounts for about 5 percent of total health expenditures. It is used mostly to cover cost-sharing requirements, elective surgery in private hospitals, and private outpatient specialist consultations. Private coverage also can ensure faster access to nonurgent treatment. About one-third of the population has some form of private insurance, and it is purchased predominantly by individuals.
Services covered: The publicly funded system covers the following services:
- preventive care
- inpatient and outpatient hospital services
- primary care via private providers, except for certain services, such as optometry, adult dental services, orthodontics, and physiotherapy
- maternity services
- physical therapy
- durable medical equipment
- inpatient and outpatient prescription drugs included on the national formulary
- mental health care
- dental care for schoolchildren
- long-term care
- home help
- hospice care
- disability support services.
Rationing of services and prioritization are applied largely to nonurgent services and vary by district health board.
Cost-sharing and out-of-pocket spending: Out-of-pocket payments, including both cost-sharing and other costs paid directly by private households, accounted for approximately 12.6 percent of total health expenditures in 2015. The largest portion went to outpatient services.3
There are no deductibles in the public sector, although copayments are required for GP services and many nursing services provided in GP clinics. Immunizations and cancer screening services are usually free. The average adult copayment for a GP consultation varies significantly, from NZD 15 to NZD 50 (USD 10 to USD 34).4 In general, the government does not set limits on GP copayments, although the government has capped GP copayments at NZD 17.50 (USD 12.00) for one-third of New Zealanders residing in low-income areas.
For drugs prescribed by GPs and private specialists, copayments of NZD 5.00 (USD 3.40) are required for the first 20 prescriptions per family per year, after which there are no copayments.
Residents receive treatment free of charge in public hospitals, although there are some user charges, such as those for crutches and other aids supplied on discharge.
Safety nets: Primary care is mostly free for children ages 13 and under and is subsidized for the 98 percent of the population enrolled in networks of primary health organizations.
Patients who have had more than 12 GP visits in a year can apply for a high-use health card, which reduces the amount they owe in copayments. Low-income people can also lower their copayments by seeking a community services card.
Norway has universal health and social insurance coverage, known as the National Insurance Scheme (NIS), or Folketrygd. It is currently regulated by the 1997 National Insurance Act and the 1999 Patient Rights Act.
The establishment of universal coverage has a long history in Norway. Political and social movements began advocating for universal social and health care insurance around 1900. The Act of Health Insurance, covering employees as well as their families, came into force in 1909. Membership was mandatory for low-income employees; others could opt in. The coverage was twofold: health care and guaranteed basic income in case of income loss due to ill health. In 1956, the system was converted into a universal and mandatory right for all citizens.
Role of government: The national government is responsible for providing health care in accordance with the goal of equal access to care regardless of social or economic status or geographical location.1 It is also responsible for regulating, funding, and overseeing the provision of care. However, responsibility for the administration of care is shared with the municipalities, through the municipal councils.
Primary, preventive, and nursing care are organized locally. In addition, the municipalities, often in cooperation with the counties, decide on public health initiatives or campaigns to promote healthy lifestyles and reduce social health disparities. All municipalities must statutorily guarantee access to publicly funded physiotherapy services.
Municipalities are also responsible for providing long-term care, which is not included in universal health insurance.
The national government is responsible for hospital and specialty care, which are handled at a local level through four Regional Health Authorities (RHAs) The RHAs have the overall responsibility for implementing national health policy through planning, organizing, managing, and coordinating activities with the hospital and pharmacy trusts in their region.
The following agencies have important roles in Norway’s health care system.
- The National Board of Health Supervision is the central supervisory authority over health care.
- The Ministry of Health and Care Services translates political decisions into practice through legislation, economic measures, and documents that instruct underlying agencies.
- The Directorate of Health is responsible for implementing national health policy through targeted activities across services, sectors, and administrative levels, including the development of national clinical guidelines and licensing of health personnel.
- The Norwegian Health Economics Administration (Helfo) is responsible for making direct payments to providers and setting reimbursement levels.
- The Health and Social Services Ombudsmen in each county acts as a patient advocacy agency, assisting patients and clients to get the help or treatment they need.
- The eHealth Directorate is responsible for leading the development and application of health information technology and providing information about the performance of health services.
- The Norwegian Medicines Agency (Statens legemiddelverk, or NOMA) safeguards public and animal health by ensuring the efficacy, quality, and safety of medicines and by administering and enforcing medical device regulations.
- The Norwegian Institute of Public Health (NIPH) conducts research and surveillance related to the population’s health, including disease prevalence and infection control.
Role of public health insurance: Health expenditures represented 10.5 percent of GDP in 2016, or NOK 68,065 (USD 6,647) per person,2 according to the Organisation for Economic Co-operation and Development (OECD). Public sources account for most health expenditures in Norway, at 85 percent.
Health coverage is automatic for all residents and has two main funding sources: the general tax system and household out-of-pocket payments. The split between public and private funding has been stable for the past 20 years. Public sources consist of transfers from national and municipal taxes, representing 76 percent, and contributions from state and payroll taxes, representing 11 percent. Taxation rates are set in the national budget. In 2018, the employee rate was 8.2 percent and the employer rate varied between 5.1 percent and 14.1 percent.3
Government funding for municipalities is generally not earmarked, and budgets are set locally by the municipality councils. The main sources of income for municipalities are taxes (55%) and block grants from the government (45%). Fifty-two percent of municipal budgets is devoted to health care and social services.
The NIS accounted for 35 percent of the national budget in 2015, or NOK 420 billion (USD 41.2 billion). The distribution of funding was 31 percent from enrollees, 41 percent from employers, and 28 percent from the state and others.4
In addition to health coverage, the NIS finances public retirement funds, sick leave payments, and additional health costs for some patient groups.
Through common agreements, European Union (EU) residents have the same access to health services in Norway as in their home country. Visitors from most other countries are charged in full. Undocumented adult immigrants have access only to emergency acute care, while undocumented children receive the same care as citizens.
Role of private health insurance: For-profit insurers offer quicker access to outpatient services and greater choice of private providers. Private insurance policies cover fewer than 5 percent of elective services; it does not cover acute-care services. In 2016, about 10 percent of the population (500,000) had some private insurance. About 90 percent of these policies are paid for by an employer.5 Revenue from private voluntary health insurance remains negligible.
Services covered: Parliament determines what is covered, although there is no defined benefit package except for new and costly treatments and technologies.
In practice, national health care covers the following:
- primary and ambulatory care
- hospital care
- mental health treatment
- outpatient prescription drugs, if included on the national formulary
- preventive services
- maternity care from a midwife at a Maternity and Child Health Care Centre or from a general practitioner (GP)
- home-based care and palliative care
- medical equipment on a needs basis
- dental care for children up to age 18, people with chronic diseases, nursing home residents, and other prioritized groups, as well as partial dental coverage for young adults ages 19 and 20 and dental braces for children.
Regular glasses and contact lenses are not covered unless the vision is very limited. Cosmetic surgery is not covered.
Again, long-term care is not a part of universal health insurance and is covered by the municipalities and patient copayments (see “ Long-term care and social supports,” below).
Cost-sharing and out-of-pocket spending: Out-of-pocket payments account for the biggest part of private revenues and made up approximately 14.3 percent of health expenditures in 2015. Patients owe copayments for most types of outpatient care (see table).
Safety nets: The major safety-net mechanisms are annual caps, set by Parliament, for out-of-pocket expenditures, above which all user fees are waived (see table).
Other safety net mechanisms include the following.
- Residents eligible for minimum retirement or disability pensions, which amount to about NOK 167,169 (USD 16,389) per year, receive free essential drugs and nursing care.
- Individuals with certain communicable diseases, including HIV/AIDS, and patients with work-related injuries receive free medical treatment for their conditions.
- Taxpayers with high health expenses, above NOK 9,180 (USD 900), due to permanent illness receive a tax deduction.
- Patients who regularly incur additional expenses because of permanent illness, injury, or disability may apply for an additional cash transfer known as basic benefits (NOK 678–3,383 [USD 66–332] per month).
- Individuals whose functional capacity is significantly and permanently (i.e., for more than two years) impaired owing to injury, bodily defect, or other health issues are entitled to receive financial support for assistive devices, such as wheelchairs, under NIS.
Singapore’s health care financing system is underpinned by the belief that all stakeholders share responsibility for attaining sustainable universal health coverage. Singapore has a multipayer health care financing framework, where a single treatment episode might be covered by multiple schemes and payers, often overlapping. The system, known as the 3Ms, comprises the following programs:
- MediShield Life, a universal basic health care insurance, is mandatory for citizens and permanent residents and provides lifelong protection against large hospital bills and select costly outpatient treatments. It was launched in 2015 to replace MediShield, an opt-out catastrophic illness insurance scheme.
- MediSave, a national medical savings scheme, helps cover out-of-pocket payments. Personal and employer salary contributions (8%–10.5%, depending on age) to MediSave accounts are mandatory for all working citizens and permanent residents. These tax-exempt, interest-bearing (currently 4% to 5%) accounts can be used to pay for family members’ health care expenses.1
- MediFund is the government’s safety net for needy Singaporeans who cannot cover their out-of-pocket expenses, even with MediSave.
Role of government: The Ministry of Health’s mission is to promote good health and reduce illness, ensure access to good and affordable health care, and pursue medical excellence. The Ministry of Health is responsible for regulating the public health system and the health care system overall.2
The government relies on competition and market forces to improve service and raise efficiency but intervenes directly when the market fails to keep health care costs down.3 For example, the Ministry of Health performs workforce planning to determine the number of health care professionals required, coordinates the training capacity, and dictates land availability for hospital and other health care facility development.4 The ministry also ensures that longer-term population needs are met through sustainable investment, especially in preventive and community-based care.5
The Ministry of Health has centralized certain functions to prevent fragmentation and to encourage economies of scale. National organizations with important functions include the following:
- MOH Holdings, the holding company for public health care institutions. It also handles infrastructure development and coordination of manpower and talent development for the national health system. Subsidiaries of MOH Holdings include:
- Integrated Health Information Services, which integrates, delivers, and manages information technology systems across all public health care institutions.
- The Agency for Integrated Care, which coordinates and facilitates placement of individuals with community providers, enables community providers through service development and capability-building, and administers some subsidy schemes.6 In 2018, the agency was also charged with coordinating the delivery of aged-care services across both the health and the social domain.
- The Agency for Care Effectiveness, Singapore’s national health technology assessment agency, which provides guidance on cost-effective drugs and treatments.
- The Health Sciences Authority, which regulates the manufacture, import, supply, storage, presentation, and advertisement of health products to meet appropriate safety, quality, and efficacy standards.
- The Health Promotion Board, responsible for promoting healthy living in Singapore. The board formulates health policies, implements health promotion and disease prevention programs (like those for school health and workplace health), and works with industry partners for healthier food products.
- The Central Provident Fund Board, which administers the MediSave and MediShield Life schemes on behalf of the Ministry of Health.
Role of public health insurance: Singapore’s national health expenditures stood at 4.47 percent of GDP in 2016.7 Between 2009 and 2016, the government’s share of health expenditures increased from about 32 percent to 41 percent due to increased public subsidies, which are intended to help reduce out-of-pocket costs.8 Correspondingly, the out-of-pocket share of health expenditures fell from 43 percent to 31 percent. Singapore’s average annual health care inflation was 2.6 percent, compared to 2.3 percent for all goods and services, between 2007 and 2017.9
MediShield Life premiums are subsidized by the government on the basis of income. In addition, working-age persons pay higher premiums so that older residents can have lower premium increases. These features have helped to keep annual premiums affordable, ranging from SGD 98 (USD 72)10 for low-income Singaporeans under age 20 to SGD 1,530 (USD 1,117) for high-income residents over age 90.11 To ease the transition from the old MediShield scheme’s lower premiums (with its age cut-off and exclusion of those with preexisting illnesses) to the higher premiums of MediShield Life, which provides lifelong coverage, beneficiaries with serious preexisting conditions pay 30 percent higher premiums for the first 10 years, after which they pay the same standard premium as their low-risk counterparts.12 During the first five years of MediShield Life, the government cushioned the impact of bringing beneficiaries with preexisting conditions into the scheme by absorbing about 75 percent of the costs, which was approximately SGD 850 million (USD 621 million).13
The government provides various other subsidies to help make care more affordable:
- At public hospitals, patients can obtain a subsidy by choosing a ward with fewer amenities. For example, patients admitted to C-class wards, which are rooms with eight beds, receive a subsidy of up to 80 percent of their hospital bill for that admission. In contrast, A-class single occupancy rooms are not subsidized. Clinical care is not affected by ward class.
- Primary care visits at public clinics, known as polyclinics, are subsidized up to 75 percent, with different charges based on residency status.
- Specialist outpatient care visits can be subsidized up to 75 percent, depending on the patient’s income level and residency status.
- Emergency services at public hospitals are subsidized equally for all.
- Subsidies are also provided to patients requiring intermediate and long-term care after hospital discharge, as well as to community-dwelling elderly individuals needing assistance with daily living. Subsidies are means-tested on the basis of household income or the value of a patient’s residence (for those without income). Patients can receive up to a 75 percent subsidy for residential services and up to an 80 percent subsidy for nonresidential services if they are receiving care from providers approved by the Ministry of Health.14 Additional government cash grants and subsidies for consumables and transportation services are available for patients who need assistance with daily living.
In addition, the Community Health Assist Scheme, for lower- to middle-income citizens, provides subsidies that can be used at private general practitioner (GP) and dental clinics. About 1.2 million Singaporeans are in the scheme, and they receive subsidized care at more than 1,000 GPs and 700 dental clinics.15 In 2018, the government disbursed about SGD 152 million (USD 111 million) in subsidies under the Community Health Assist Scheme to about 630,000 Singaporeans.16
Government health care subsidies are funded from general taxation and are based on the principles of fiscal balance and affordability.
The government has also introduced measures to supplement Singaporeans’ MediSave accounts. For example, lower-income workers receive top-ups to help them save for their retirement health care needs.17 The government also provides annual top-ups to the MediSave accounts of eligible elderly people and gives newborns a MediSave grant of SGD 4,000 (USD 2,940) to defray part of their parents’ infant care expenses.
Role of private health insurance: Patients who wish to obtain additional coverage for private hospitals or care in private wards in public hospitals can purchase private insurance. The most common coverage is through Integrated Shield Plans, which ride on MediShield Life and are available only to citizens and permanents residents with MediShield Life. As of 2017, 68 percent of citizens and permanent residents had one of these plans.18 In contrast to the standard benefits of MediShield Life, different Integrated Shield Plans offer different benefits. Premiums for these plans can be paid for using MediSave, subject to various limits and regulations.19
Integrated Shield Plan holders can also purchase insurance riders that provide additional complementary coverage; these riders usually provide first-dollar coverage with either a yearly deductible or zero copayment. Premiums for riders cannot be paid with MediSave.
In recent years, there have been sharper increases in Integrated Shield premiums, especially for riders with no copayment, a trend largely reflective of increases in private hospital insurance claims.20 To address concerns about the overuse of services and about overcharging, the Ministry of Health has required that new Integrated Shield Plan riders have a minimum 5 percent copayment with an annual cap on copayments.21
There are also private insurance options, offered by for-profit insurers, that are not integrated with MediShield Life. Premiums for these other insurance options cannot be paid from MediSave. Many employers also extend medical benefits to their employees.
Because of the many insurance options available, there may be varying degrees of coverage duplication by MediShield Life, employer benefits, and personal health insurance.
Services covered: Services covered under MediShield Life are22:
- inpatient treatments and care, including surgery, radiosurgery, and bone marrow transplants
- day surgeries
- psychiatric hospital stays
- selected outpatient treatments, including kidney dialysis and chemotherapy and radiotherapy for cancer
- some costly long-term medications, such as immunosuppressants after an organ transplant.
MediShield Life does not cover cosmetic surgery or maternity charges (including cesarean sections), with the exception of treatments for serious complications related to pregnancy and childbirth.
The maximum amount that can be claimed from MediShield Life depends on the claim limit, which varies by type of treatment and length of hospital stay. The maximum claim limit per policy year is set at SGD 100,000 (USD 73,000); there is no lifetime limit.
Singaporeans are expected to pay for the rest of their health care costs (after government subsidies and MediShield Life payments) from their MediSave accounts or out-of-pocket. MediSave can be used to pay for many services, including chronic care, maternity care, fertility treatments, hospice and palliative care, and day rehabilitation services.
Limits on withdrawals from MediSave accounts ensure that Singaporeans have enough in those accounts for basic health care needs in old age. Withdrawal limits are adequate to ensure that most charges incurred for outpatient treatments and treatments at subsidized inpatient wards are covered. Withdrawal limits have been raised to keep pace with rising costs.
Cost-sharing and out-of-pocket spending: Under MediShield Life, residents have an annual deductible of SGD 1,500 to SGD 3,000 (USD 1,095–2,190) and coinsurance of 3 percent to 10 percent (with the coinsurance percentage decreasing as the claimable amount increases).23 For current outpatient treatments, there is 10 percent coinsurance.
Copayments (see table below) have been an integral feature of Singapore’s health care system as a way to retain individual responsibility for one’s health, as well as provider and system discipline pertaining to health care costs. Patients pay directly for part of the cost of services, and pay more when they demand a higher level of services.24
Safety nets: The combination of government subsidies, MediShield Life, and MediSave has enabled seven in 10 subsidized bills to be fully paid without any cash outlay by the patient. Of the remaining 30 percent of bills, one-third require a patient payment of SGD 100 (USD 73) or less in cash, and another third cost patients SGD 100 to SGD 500 (USD 73–365).25
MediFund is an endowment fund set up by the government in 1993 that serves as a safety net for Singaporeans who need further help with the remaining cash component of their health care bills at public health care institutions, after insurance and MediSave. MediFund coverage has been enhanced over the years to cover more outpatient and community-based care as well as to provide more targeted assistance to disadvantaged children and elderly people.
During years of budget surpluses, the government tops up the principal sum, redistributing the benefits of economic growth to Singaporeans in need. This measure has enabled an increase in enrollment in MediFund, which provided about SGD 150 million (USD 110 million) in assistance in 2017, up from SGD 4.7 million (USD 3.4 million) in 1993.26
The Health and Medical Services Act states that Sweden’s health system must cover all legal residents.1 Coverage is universal and automatic. Emergency coverage is provided to all patients from the European Union, European Economic Area countries, and nine other countries with which Sweden has bilateral agreements. Asylum-seeking and undocumented children have the right to health care services, as do children who are permanent residents. Adult asylum-seekers and undocumented adults have the right to receive care that cannot be deferred, such as maternity care.
Three basic principles apply to all health care in Sweden:
- Human dignity: All human beings have an equal entitlement to dignity and have the same rights regardless of their status in the community.
- Need and solidarity: Those in greatest need take precedence in being treated.
- Cost-effectiveness: When a choice has to be made, there should be a reasonable balance between costs and benefits, with costs measured in relation to improvement in health and quality of life.
Role of government: All three levels of Swedish government are involved in the health care system.
- At the national level, the Ministry of Health and Social Affairs is responsible for overall health care policy and regulation and sets budgets for government agencies and grants to regions, working in concert with eight national government agencies.
- At the regional level, 21 regional bodies are responsible for financing and delivering health services to residents.
- At the local level, 290 municipalities are responsible for care of the elderly and the disabled, including long-term care.
The local and regional authorities are guided by local priorities and national regulation in their decisions. Nationally, they are represented by the Swedish Association of Local Authorities and Regions (SALAR).
Eight independent government agencies are directly involved in medical care and public health:
- The National Board of Health and Welfare supervises and licenses all health care personnel, disseminates information, develops norms and standards for medical care (e.g., national guidelines for specific therapeutic areas), and, through data collection and analysis, ensures that those norms and standards are met. The agency also maintains health data registries and official statistics.
- The Swedish eHealth Agency promotes information-sharing among health and social care professionals and decision-makers. It stores and transfers electronic prescriptions issued in Sweden and is responsible for transferring electronic prescriptions abroad. The agency is also responsible for statistics on drugs and pharmaceutical sales.
- The Health and Social Care Inspectorate is responsible for supervising health care, social services, and activities concerning support and services for people with disabilities. It is also responsible for issuing permits in those areas.
- The Swedish Agency for Health and Care Services Analysis analyzes and evaluates health policy and the availability of health care information to citizens and patients.
- The Public Health Agency provides the national government, government agencies, municipalities, and regions with evidence-based knowledge regarding infectious-disease control and public health.
- The Swedish Council on Technology Assessment in Health Care promotes the use of cost-effective health care technologies. The council reviews and evaluates new treatments from medical, economic, ethical, and social points of view.
- The Dental and Pharmaceutical Benefits Agency is the principal agency for assessing pharmaceuticals. Since 2002, it has had a mandate to decide whether particular drugs and medical devices should be included in the National Drug Benefit Scheme; prescription drugs and medical devices are priced, in part, on the basis of their value. The agency’s mandate also includes dental care.
- The Medical Products Agency is the Swedish national authority responsible for the regulation and surveillance of the development, manufacture, and sale of drugs and other medicinal products.
Role of public health insurance: Health expenditures accounted for 10.9 percent of GDP in 2016. About 84 percent of this spending was publicly financed, with regions’ expenditures amounting to almost 57 percent, municipalities’ up to 25 percent, and the central government’s to almost 2 percent.2 In 2016, 88 percent of regions’ total spending was on health care.3 The regions and the municipalities levy proportional income taxes on their populations to help cover health care services. In 2016, 70 percent of the regions’ total revenues came from local taxes and 16 percent from subsidies and national government grants, which are financed by national income taxes and indirect taxes. General government grants are designed to redistribute resources among municipalities and regions based on need. Targeted government grants finance specific initiatives, such as reducing wait times.
Role of private health insurance: Private health insurance, in the form of supplementary coverage, accounts for less than 1 percent of health expenditures. It is purchased mainly by employers and is used primarily to guarantee quick access to an ambulatory care specialist and to avoid wait lists for elective treatment. In 2017, 633,000 individuals had private insurance, representing roughly 13 percent of all employed individuals ages 16 to 64 years.4
Services covered: There is no defined benefit package. Because the responsibility for organizing and financing health care rests with the regions and municipalities, services vary to some extent throughout the country. Broadly, however, the publicly financed health system covers the following:
- Public health and preventive services
- Primary care, including maternity care
- Inpatient and outpatient specialized care
- Emergency care
- Inpatient and outpatient prescription drugs
- Mental health care
- Rehabilitation services, including physical therapy
- Disability support services, including durable medical equipment such as wheelchairs and hearing aids
- Patient transport support services
- Home care and long-term care, including nursing home care and hospice care
- Dental care and optometry for children and young people
- Adult dental care with limited subsidies.
Cost-sharing and out-of-pocket spending: In 2016, about 16 percent of all health expenditures were private; of these, 92 percent were out of pocket.5 Most out-of-pocket spending is for drugs and dental care.6
The regions set copayment rates for outpatient visits and hospital stays, leading to some variation across the country (see table below). However, pharmaceutical and dental benefits are determined by the national government and apply to all residents.
Safety nets: In general, all social groups are entitled to the same benefits. Ceilings on out-of-pocket spending (see table below) apply to everyone, and the overall cap on user charges is not adjusted for income. Some targeted groups, such as children, adolescents, and the elderly, are exempt from user charges. In addition, preventive services, such as maternity care, immunizations, and cancer screenings, do not have copayments.
Historically, health insurance in Switzerland had been provided by many small private insurers. After several attempts to introduce a system of universal coverage, the federal government adopted the Health Insurance Law in 1994, based on a private insurance model. The law’s objectives were to:
- strengthen equality by introducing universal coverage and subsidies for low-income households
- expand the benefit basket and ensure high standards of health services
- contain the growing costs of the health system.1
Since going into effect in 1996, health insurance coverage is close to 100 percent. Citizens are legally required to purchase insurance, and the cantons ensure compliance. Insurance policies typically apply to individuals, and separate coverage must be purchased for dependents. New residents must purchase a policy within three months of arriving in Switzerland, and coverage applies retroactively to the arrival date. Temporary nonresident visitors pay for care themselves and claim expenses from any insurance coverage they hold in their home countries. The absence of mandatory health insurance for undocumented immigrants remains an unsolved problem.
Role of government: Duties and responsibilities in the Swiss health care system are divided among the federal, cantonal, and municipal governments. Each of the 26 cantons has its own constitution and is responsible for licensing providers, coordinating hospital services, promoting health through disease prevention, and subsidizing institutions and individual premiums. The federal government regulates system financing, ensures the quality and safety of pharmaceuticals and medical devices, oversees public health initiatives, and promotes research and training. The municipalities are responsible mainly for organizing and providing long-term care (nursing home care and home care services) and other social support services for vulnerable groups.
Since health care is largely decentralized, the key entities for health system governance exist mainly at the cantonal level. Each canton has its own elected minister of public health; a coordinating political body, the Swiss Conference of Cantonal Health Ministers, plays an important role.
Other important health-related agencies include the following:
- The Federal Office of Public Health, which is the main national player, supervises the legal application of mandatory health insurance, authorizes statutory insurance premiums, governs statutory coverage (including health technology assessment), and determines the prices of pharmaceuticals. The agency is also responsible for national health strategies, including health promotion, disease prevention, and health equity.
- The Swiss Federal Department of Home Affairs formally defines the mandatory health insurance benefit basket by evaluating whether services are appropriate and cost-effective. It is supported in this task by the Federal Office of Public Health and by Swissmedic, the agency that authorizes and supervises therapeutic products.
- The nonprofit corporation SwissDRG AG is responsible for defining, developing, and adapting the national system of relative cost weights per case used for determining provider payment for inpatient services.
- Health Promotion Switzerland, a nonprofit organization, is legally charged with health promotion programs and provides public information on health.
- The Association of Swiss Patients and a national ombudsman for health insurance engage in patient advocacy.
Role of public health insurance: In 2016, total health expenditures represented 12.2 percent of Switzerland’s GDP, or CHF 80.7 billion (USD 66.7).2,3 Publicly financed health care accounts for 62.8 percent of health spending, or 7.7 percent of GDP. The public health insurance system has three streams of funding:
- Mandatory health insurance premiums accounted for 35.6 percent of total health spending in 2016.
- General taxes financed 17.3 percent of total health expenditures in 2016, with cantonal taxes accounting for 15.0 percent, municipal taxes for 1.8 percent, and federal taxes for 0.4 percent.
- Contributions to other social insurance schemes, including military, old-age, and disability insurance, made up 10.0 percent of spending in 2016.
Mandatory health insurance is offered by competing nonprofit insurers on cantonal exchanges. It is not sponsored by employers. The insurers are supervised by the Federal Office of Public Health.
The 56 insurers on the exchanges provide policies for three distinct age groups — children through age 18, young adults 19 to 25, and adults 26 and above — each at six different deductible levels. In addition to the standard coverage model (basic coverage with free choice of doctor), there are various alternatives that restrict provider choice: health maintenance organizations (HMOs); family doctor models, which require an initial consultation with the family physician (gatekeeper) in the event of illness; and call-center models, under which patients call a consultation hotline prior to seeing a doctor. In 2016, 65.7 percent of those insured chose an alternative insurance plan.4 Some health plans also offer accident coverage.
In 2018, the average annual premium across Switzerland was CHF 5,584 (USD 4,615). However, there can be significant variation in premiums among insurers and insurance plans. In 2018, the average annual cantonal premium ranged from CHF 4,248 (USD 3,511) to CHF 7,102 (USD 5,869) for adults with a standard insurance model, accident coverage, and the minimum deductible of CHF 300 (USD 248).5
Individuals pay premiums through the insurer of their choosing. Then funds are redistributed among insurers by a central fund, in accordance with a risk-equalization scheme that is adjusted for canton, age, gender, and major expenditures in the previous year, such as hospital or nursing home stays and pharmaceutical costs.
Role of private health insurance: Voluntary health insurance accounted for 6.7 percent of total expenditures in 2016. No data are available on the number of people covered by these plans. Residents use voluntary health coverage to pay for services not covered by mandatory health insurance and to ensure free choice of hospitals or doctors and preferred hospital accommodation.
Voluntary health insurance is regulated by the Swiss Financial Market Supervisory Authority. Insurers can vary benefit baskets and premiums and can refuse applicants based on medical history. Service prices are usually negotiated directly between insurers and providers.
Unlike statutory insurers, voluntary insurers are for-profit; an insurer will often have a nonprofit branch offering mandatory health insurance and a for-profit branch offering voluntary insurance. It is illegal for voluntary insurers to base voluntary insurance subscription decisions on health information obtained via basic health coverage, but this rule is not easily enforced. Employers do not offer voluntary insurance.
Mandatory health insurance covers the following:
- hospital inpatient services
- most general practitioner (GP) and specialist services
- an extensive list of pharmaceuticals and medical devices
- home care services (called Spitex)
- physiotherapy (if prescribed)
- some preventive measures, including selected vaccinations, selected general health examinations, and screenings for high-risk patients
- maternity care, including prenatal checkups, birth, postpartum care, and breastfeeding advice
- outpatient care for mental illness, if provided or delegated by physicians
- medically necessary long-term care
- hospice care if there is an underlying disease.
Durable medical equipment, such as wheelchairs, is not covered, and hearing aids are financed only if not covered by old-age and disability insurance. Dental care is largely excluded for adults, as are glasses and contact lenses for adults (unless medically necessary); however, these services and supplies are covered for children up to age 18.
Cost-sharing and out-of-pocket spending: Under mandatory health insurance, insurers are required to offer a minimum annual deductible of CHF 300 (USD 248) for adults and a zero deductible for children through the age of 18. Insured persons may opt for a higher deductible of up to CHF 2,500 (USD 2,066) for adults and CHF 600 (USD 496) for children, with a lower premium.
In 2016, about 54 percent of all insured persons opted for an insurance model with the minimum deductible of CHF 300/0 (USD 248/0), and about 46 percent chose a model with a higher deductible and a lower premium.6
In addition to deductibles, insured persons pay 10 percent coinsurance for all services (except for maternity care and some preventive services), with a cap of CHF 700 (USD 579) per year for adults and CHF 350 (USD 289) for children through age 18. For brand-name drugs that have a generic alternative, 20 percent coinsurance is charged instead of 10 percent. For hospital stays, there is an additional CHF 15 (USD 12) copayment per inpatient day.
Cost-sharing in Switzerland’s mandatory health insurance program accounted for 5.3 percent of total health expenditures in 2016.7
Safety nets: Maternity care and some preventive services (mammograms and colorectal cancer screenings) are fully covered and are therefore exempt from deductibles, coinsurance, and copayments. Children or young adults in school (through age 25) are exempt from copayments for inpatient care.
The federal government and the cantons provide income-based subsidies to some individuals or households to cover mandatory health insurance premiums; income thresholds vary widely by canton.8 Overall, 27.3 percent of residents in 2016 benefited from individual premium subsidies.9 Municipalities or cantons cover mandatory health insurance expenses for social assistance beneficiaries and recipients of supplementary old-age and disability benefits. There is also a maximum user charge for prescription drugs and primary and specialty care — for adults, CHF 3,200 (USD 2,645. There is no maximum user charge for hospital care provided to adults (see table).
Taiwan's NHI system was implemented in 1995. Before then, Taiwan had had more than 10 public insurance schemes, each covering a particular group, such as government employees, farmers, and low-income households. These programs covered 59 percent of the population.1
In 1986, Taiwan's government proposed moving to a universal NHI program. The planning process involved studying health insurance systems abroad, borrowing parts from systems of other countries and adapting them to suit Taiwan's national conditions. On the recommendation of former government adviser Uwe Reinhardt, the late Princeton University economist, Taiwan's government established a single-payer system, which merged Taiwan's then-existing public insurance schemes.2 Reinhardt's recommendation was based on three principles:
- Equity in both access and benefits
- Effective and egalitarian cost control
- Administrative simplicity to help the public understand the system.
The NHI Act became law in July 1994 and implemented rapidly in 1995.3 NHI is a government-run social health insurance program that provides equitable medical and health care services to all in case of illness, injury, and childbirth. Enrollment in NHI is mandatory for all citizens and for foreigners legally residing in Taiwan for longer than six months. Virtually all residents are enrolled.
Role of government: The NHI program is administered by the National Health Insurance Administration (NHIA), which falls under the Ministry of Health and Welfare (MoHW). The NHIA is supported by six regional offices connected by a health information infrastructure. Local and municipal governments play little to no role in financing health care.
The bulk of NHI-covered services are delivered through a predominantly private delivery system, although some hospitals are owned and operated by municipal governments.
Because Taiwan has a single-payer health system, governance is fairly simple and straightforward. The MoHW, which sets policy, determines how much the NHI global budget should grow from year to year (subject to approval by the premier’s office) — a months-long process involving multistakeholder negotiations.
The NHIA oversees and administers NHI. The NHIA's main tasks include collecting premiums, risk-pooling, and paying providers, as well as oversight of health services utilization, expenditures, and quality. The NHIA is also responsible for coverage decisions (based on cost-effectiveness analyses of new drugs and treatments), provider fee–setting and fee schedule adjustments, and cost containment. In addition, the agency is charged with identifying new funding sources (such as higher tobacco taxes) and administering a sectoral global budget system.
Parliament plays an important watchdog role in all NHI matters. In addition to its role in negotiating any new health legislation, it must pass an amendment to the NHI Act for any premium rate increases above 6 percent.
Role of public health insurance: Taiwan's national health expenditures totaled 6.4 percent of GDP in 2017, of which NHI accounted for 53.7 percent, representing approximately 3.4 percent of GDP.4
Taiwan’s NHI is a predominantly premium-based social health insurance system. As of 2018, 81 percent of the system’s regular premium revenues are derived in roughly equal measure from individuals, employers, and the government. The balance of revenues comes from supplementary premiums levied on nonpayroll income, such as large bonuses, rent, interest, dividends, professional fees, and income from second and third jobs, as well as additional government premium subsidies, tobacco taxes, and taxes on lottery gains.5
Payroll-based premium payments are made monthly and are calculated as follows:
Salary Basis × Standard Premium (4.69% of payroll × Contribution Ratio ×
(1 + Number of Dependents))
The contribution ratio is based on the insured's “population category status,” which is determined by an individual’s job and by socioeconomic status. For example, employees of “public or privately owned enterprises and organizations” belong to Population Category 1. Their contribution rate is 30 percent of their salary or wage. Of the remainder, 60 percent is paid by their employer and 10 percent by government.
Premium contributions are capped at four members per household (the insured plus three dependents). Any additional household members are covered for free. Both caps and thresholds apply for payroll-based and supplemental premiums.
Role of private health insurance: Private health insurance policies are offered by private for-profit insurers, often as riders to nonmedical policies, such as life or car insurance. These do not cover medical services already covered by NHI, nor do they buy faster access to, or choice of, specialists. Instead, such policies offer disease-specific cash indemnity provisions. Policyholders can use the cash for private hospital rooms or devices, such as drug-eluting stents, not covered by NHI.
As a component of total health expenditures, private coverage is growing. (Precise statistics on private coverage are unavailable.) Many Taiwanese view these policies as savings vehicles.
Services covered: NHI benefits are uniform and comprehensive. Covered benefits include:
- Inpatient and outpatient care (both primary and specialty care)
- Prescription drugs
- Dental care (excluding orthodontics and prosthodontics)
- Traditional Chinese medicine
- Renal dialysis
- Maternity care
- Child delivery
- Physical rehabilitation
- Home care
- Chronic mental health care
- Preventive care, including adult health checkups, cancer screenings, baby and child health care checkups, and childhood immunizations through age 6.
NHI does not cover eyeglasses or visual acuity tests, nor does it cover durable medical equipment such as wheelchairs and hearing aids. It does, however, cover costly cochlear implants for children. Those who need wheelchairs or artificial limbs may apply for government subsidies under the Welfare Law for the Handicapped; veterans who need hearing aids or artificial limbs may receive them free of charge at veterans’ hospitals.6
Cost-sharing and out-of-pocket spending: The NHIA mandates copayments for physician visits and prescription drugs, as well as coinsurance for inpatient care, subject to limits and exemptions. There are no annual or quarterly deductibles that must be met.
Copayments for outpatient specialist care range from TWD 50 (USD 1.65) to TWD 170 (USD 5.61) when the patient has a referral from a physician, and TWD 50 to TWD 420 (USD 13.86) without a referral.7,8
Copayments for outpatient prescription drugs covered under NHI are capped at TWD 200 (USD 6.
6) per outpatient visit, regardless of how many drugs are prescribed during that visit. There is no annual cap on drug copayments.
Coinsurance for inpatient care varies by length of stay and type of bed (acute or chronic). For example, the coinsurance rate for an inpatient stay of less than 30 days is 5 percent for chronic beds, and 10 percent for acute beds.9 In 2018, the cap on coinsurance per episode of stay was TWD 38,000 (USD 1,254). For any additional inpatient stays for the same illness or condition, the same cap of TWD 38,000 per stay applies, up to an annual ceiling of TWD 64,000 (USD 2,112) for that particular illness or condition.
Under NHI, all preventive services are free, such as prenatal care, well-baby checkups, Pap smears, breast cancer screenings, adult health checkups, and immunizations. However, clinics and hospitals that deliver such services charge patients a small registration fee.10
In 2016, out-of-pocket health care spending, as officially reported, accounted for 34 percent of total national health expenditures.11However, in its definition of out-of-pocket spending, Taiwan includes items not counted by the Organisation for Economic Co-operation and Development (OECD), such as infant formula, baby diapers, dietary supplements, health foods, Chinese herbal medicine, private hospital rooms, cosmetic surgery, and high-tech surgical procedures.
According to a former NHIA director-general, out-of-pocket spending associated with necessary health care, including medical care, dental care, and prescription drugs, amounted to 12.1 percent of Taiwan’s national health expenditures in 2012, a figure more in line with the OECD norm.12
Safety nets: In addition to the copayment and coinsurance caps outlined above, the government provides full (100%) premium subsidies for low-income households (1.26% percent of the population in 2018), military personnel, veterans and their dependents, and convicts. The last three groups accounted for 0.48 percent of the population in 2018.
In addition, the government funds varying premium subsidies to other population groups:
- Civil servants, volunteer servicemen, holders of public office, dependents of veterans, and members of farmer, fisherman, and irrigation associations receive premium subsidies of 70 percent.
- Union members, foreign crew members, and nonworking or retired individuals receive premium subsidies of 40 percent.
- Private school teachers get a 35 percent premium subsidy.
- Other employees of public or privately owned enterprises and organizations receive a 10 percent premium subsidy.13
In cases where the insured have lapsed in paying their NHI premiums, full access to care is guaranteed under 2016 government regulations.14
Exemptions from outpatient copayments also apply to certain conditions and population groups, including the following:
- Thirty specified catastrophic diseases and conditions, including cancer
- Residents of remote and mountainous areas and offshore islands
- Veterans and families of deceased veterans
- Low-income households
- Children under age 3
- Tuberculosis patients.15
Others receive discounts on copayments. For example, outpatient copayments for people with physical or mental disabilities are limited to TWD 50 (USD 1.65), and residents of under-resourced areas receive a 20 percent discount on copayments. In addition, copayments for home care are cut in half (from 10% to 5%) for residents who live in underserved areas or who have difficulty traveling to providers for care.16
Exemptions from drug copayments are given to patients with any of the 30 listed catastrophic diseases or conditions and to patients requiring palliative care or other symptom relief. Finally, the NHIA waives copayments for all drugs necessary to keep people with a list of MoHW-recognized rare diseases alive.
The United States does not have universal health insurance coverage. Nearly 92 percent of the population was estimated to have coverage in 2018, leaving 27.5 million people, or 8.5 percent of the population, uninsured.1 Movement toward securing the right to health care has been incremental.2
Employer-sponsored health insurance was introduced during the 1920s. It gained popularity after World War II when the government imposed wage controls and declared fringe benefits, such as health insurance, tax-exempt. In 2018, about 55 percent of the population was covered under employer-sponsored insurance.3
In 1965, the first public insurance programs, Medicare and Medicaid, were enacted through the Social Security Act, and others followed.
Medicare. Medicare ensures a universal right to health care for persons age 65 and older. Eligible populations and the range of benefits covered have gradually expanded. In 1972, individuals under age 65 with long-term disabilities or end-stage renal disease became eligible.
All beneficiaries are entitled to traditional Medicare, a fee-for-service program that provides hospital insurance (Part A) and medical insurance (Part B). Since 1973, beneficiaries have had the option to receive their coverage through either traditional Medicare or Medicare Advantage (Part C), under which people enroll in a private health maintenance organization (HMO) or managed care organization.
In 2003, Part D, a voluntary outpatient prescription drug coverage option provided through private carriers, was added to Medicare coverage.
Medicaid. The Medicaid program first gave states the option to receive federal matching funding for providing health care services to low-income families, the blind, and individuals with disabilities. Coverage was gradually made mandatory for low-income pregnant women and infants, and later for children up to age 18.
Today, Medicaid covers 17.9 percent of Americans. As it is a state-administered, means-tested program, eligibility criteria vary by state. Individuals need to apply for Medicaid coverage and to re-enroll and recertify annually. As of 2019, more than two-thirds of Medicaid beneficiaries were enrolled in managed care organizations.4
Children’s Health Insurance Program. In 1997, the Children’s Health Insurance Program, or CHIP, was created as a public, state-administered program for children in low-income families that earn too much to qualify for Medicaid but that are unlikely to be able to afford private insurance. Today, the program covers 9.6 million children.5 In some states, it operates as an extension of Medicaid; in other states, it is a separate program.
Affordable Care Act. In 2010, the passage of the Patient Protection and Affordable Care Act, or ACA, represented the largest expansion to date of the government’s role in financing and regulating health care. Components of the law’s major coverage expansions, implemented in 2014, included:
requiring most Americans to obtain health insurance or pay a penalty (the penalty was later removed)
extending coverage for young people by allowing them to remain on their parents’ private plans until age 26
opening health insurance marketplaces, or exchanges, which offer premium subsidies to lower- and middle-income individuals
expanding Medicaid eligibility with the help of federal subsidies (in states that chose this option).
The ACA resulted in an estimated 20 million gaining coverage, reducing the share of uninsured adults aged 19 to 64 from 20 percent in 2010 to 12 percent in 2018.6
Role of government: The federal government’s responsibilities include:
setting legislation and national strategies
administering and paying for the Medicare program
cofunding and setting basic requirements and regulations for the Medicaid program
funding health insurance for federal employees as well as active and past members of the military and their families
regulating pharmaceutical products and medical devices
running federal marketplaces for private health insurance
providing premium subsidies for private marketplace coverage.
The federal government has only a negligible role in directly owning and supplying providers, except for the Veterans Health Administration and Indian Health Service. The ACA established “shared responsibility” among government, employers, and individuals for ensuring that all Americans have access to affordable and good-quality health insurance. The U.S. Department of Health and Human Services is the federal government’s principal agency involved with health care services.
The states cofund and administer their CHIP and Medicaid programs according to federal regulations. States set eligibility thresholds, patient cost-sharing requirements, and much of the benefit package. They also help finance health insurance for state employees, regulate private insurance, and license health professionals. Some states also manage health insurance for low-income residents, in addition to Medicaid.
Role of public health insurance: In 2017, public spending accounted for 45 percent of total health care spending, or approximately 8 percent of GDP. Federal spending represented 28 percent of total health care spending. Federal taxes fund public insurance programs, such as Medicare, Medicaid, CHIP, and military health insurance programs (Veteran’s Health Administration, TRICARE). The Centers for Medicare and Medicaid Services is the largest governmental source of health coverage funding.
Medicare is financed through a combination of general federal taxes, a mandatory payroll tax that pays for Part A (hospital insurance), and individual premiums.
Medicaid is largely tax-funded, with federal tax revenues representing two-thirds (63%) of costs, and state and local revenues the remainder.7 The expansion of Medicaid under the ACA was fully funded by the federal government until 2017, after which the federal funding share gradually decreased to 90 percent.
CHIP is funded through matching grants provided by the federal government to states. Most states (30 in 2018) charge premiums under that program.
Role of private health insurance: Spending on private health insurance accounted for one-third (34%) of total health expenditures in 2018. Private insurance is the primary health coverage for two-thirds of Americans (67%). The majority of private insurance (55%) is employer-sponsored, and a smaller share (11%) is purchased by individuals from for-profit and nonprofit carriers.
Most employers contract with private health plans to administer benefits. Most employer plans cover workers and their dependents, and the majority offer a choice of several plans.8,9 Both employers and employees typically contribute to premiums; much less frequently, premiums are fully covered by the employer.
The ACA introduced a federal marketplace, HealthCare.gov, for purchasing individual primary health insurance or dental coverage through private plans. States can also set up their own marketplaces.
More than one in three Medicare beneficiaries in 2019 opted to receive their coverage through a private Medicare Advantage health plan.10
Medicaid beneficiaries may receive their benefits through a private managed care organization, which receives capitated, typically risk-adjusted payments from state Medicaid departments. More than two-thirds of Medicaid beneficiaries are enrolled in managed care.
Services covered: There is no nationally defined benefit package; covered services depend on insurance type:
Medicare. People enrolled in Medicare are entitled to hospital inpatient care (Part A), which includes hospice and short-term skilled nursing facility care.
Medicare Part B covers physician services, durable medical equipment, and home health services. Medicare covers short-term post-acute care, such as rehabilitation services in skilled nursing facilities or in the home, but not long-term care.
Part B covers only very limited outpatient prescription drug benefits, including injectables or infused drugs that need to be administered by a medical professional in an office setting. Individuals can purchase private prescription drug coverage (Part D).
Coverage for dental and vision services is limited, with most beneficiaries lacking dental coverage.11
Medicaid. Under federal guidelines, Medicaid covers a broad range of services, including inpatient and outpatient hospital services, long-term care, laboratory and diagnostic services, family planning, nurse midwives, freestanding birth centers, and transportation to medical appointments.
States may choose to offer additional benefits, including physical therapy, dental, and vision services. Most states (39, as of 2018) provide dental coverage.12
Outpatient prescription drugs are an optional benefit under federal law; however, currently all states provide drug coverage.
Private insurance. Benefits in private health plans vary. Employer health coverage usually does not cover dental or vision benefits.13
The ACA requires individual marketplace and small-group market plans (for firms with 50 or fewer employees) to cover 10 categories of “essential health benefits”:
ambulatory patient services (doctor visits)
maternity and newborn care
mental health services and substance use disorder treatment
rehabilitative services and devices
preventive and wellness services and chronic disease management
pediatric services, including dental and vision care.
Cost-sharing and out-of-pocket spending: In 2018, households financed roughly the same share of total health care costs (28%) as the federal government. Out-of-pocket spending represented approximately one-third of this, or 10 percent of total health expenditures. Patients usually pay the full cost of care up to a deductible; the average for a single person in 2018 was $1,846. Some plans cover primary care visits before the deductible is met and require only a copayment.
Out-of-pocket spending is considerable for dental care (40% of total spending) and prescribed medicines (14% of total spending).14
Safety nets: In addition to public insurance programs, including Medicare and Medicaid, taxpayer dollars fund several programs for uninsured, low-income, and vulnerable patients. For instance, the ACA increased funding to federally qualified health centers, which provide primary and preventive care to more than 27 million underserved patients, regardless of ability to pay. These centers charge fees based on patients’ income and provide free vaccines to uninsured and underinsured children.15
To help offset uncompensated care costs, Medicare and Medicaid provide disproportionate-share payments to hospitals whose patients are mostly publicly insured or uninsured. State and local taxes help pay for additional charity care and safety-net programs provided through public hospitals and local health departments.
In addition, uninsured individuals have access to acute care through a federal law that requires most hospitals to treat all patients requiring emergency care, including women in labor, regardless of ability to pay, insurance status, national origin, or race. As a consequence, private providers are a significant source of charity and uncompensated care.