Paul Sanchez
The existence of private insurance alongside universal healthcare is a hotly debated topic in the US, with some politicians advocating for its removal. However, in other countries, private insurance is often allowed to coexist with universal healthcare. Canada is one of the only high-income countries that does not embrace private insurers for medically necessary care. In contrast, countries like Switzerland, the Netherlands, Germany, and Australia have shorter wait times and allow private insurers to operate within their universal healthcare systems. These countries demonstrate that private insurers can play a key role in ensuring universal health coverage while maintaining shorter wait times.
| Characteristics | Values |
|---|---|
| Countries with banned private insurance | Canada |
| Countries with allowed private insurance | Switzerland, the Netherlands, Germany, Australia, the UK, the US, Denmark |
What You'll Learn
Private insurance in other countries with universal health care
Universal healthcare is a broad concept that has been implemented in several ways across the world. While some countries have a public healthcare system, others have a mixed public-private system. In some countries, the government heavily regulates a network of private insurance companies to deliver universal healthcare.
Canada
Canada outlaws private care, making it the only country on the list to do so. However, some Canadians have private insurance for prescription drugs, which the national program doesn't cover.
Finland
Finland has a highly decentralized three-level public system of healthcare alongside a much smaller private healthcare system. The private medical sector accounts for about 14% of total healthcare spending. Only 8% of doctors choose to work in private practice, and some of these doctors also work in the public sector.
France
France has a system of healthcare largely financed by the government through national health insurance. However, not all medical care is paid for by the state, with only 70% of initial GP care covered and anywhere between 35% and 100% of prescription medication covered.
Germany
Germany has the world's oldest national social health insurance system. About 90% of the population is covered by a statutory health insurance plan, while the rest are covered by private health insurance. Private health insurance is only accessible to self-employed workers, high-income employees, and civil servants.
Switzerland
Switzerland has a universal public healthcare system where the government ensures affordability, largely through compulsory savings and price controls, while the private sector provides most care. Overall, spending on healthcare amounts to only 3% of annual GDP, of which 66% comes from private sources. Many Swiss also have supplemental private health insurance for services not covered by the government's programs.
United Kingdom
The UK's National Health Service (NHS) provides public healthcare to all UK permanent residents. Private healthcare companies are free to operate alongside the public system. Private insurance accounts for only 4% of health expenditure and covers little more than a tenth of the population.
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Private insurance in Canada
Canada's healthcare system is primarily operated by the government, and treatment is provided to Canadian citizens and residents with a 70% subsidy. This means that the government will typically pay 70% of all medical costs for individuals who qualify for the public medical system.
Despite the high quality of care attributed to the public healthcare system in Canada, there are some major concerns, mainly pertaining to treatment waiting times and the number of trained doctors and nurses providing treatment. In some studies, it was reported that approximately 57% of Canadians wait more than four weeks to see a specialist, with the highest waiting times for patients requiring orthopedic surgery or suffering from cancer. These waiting times have been attributed to a lack of sufficiently qualified medical practitioners, with doctors in the Canadian healthcare service unable to make an income comparable to their counterparts in the USA. This has seen almost one out of every nine Canadian doctors relocate to America.
Due to the long waiting times associated with treatments, it is estimated that approximately 65% of all residents are covered by some form of private health insurance in Canada. This allows them to seek alternative treatment routes if the waiting periods are too long and ensures that they will have coverage outside of the country if they need it. Private insurance can also be used to cover medical services not included in public healthcare, such as eye care, dental care, and prescription medications.
Private health insurance plays a major supporting role in Canada, particularly for prescription drugs, dental services, and eye care. Expenditures from private insurers totalled $22.7 billion in 2010, accounting for 11.7% of healthcare spending. About 60% of Canadians are covered by private health insurance, most often as an employment benefit. For-profit firms dominate the private health insurance landscape in Canada, representing about 80% of the market.
Canada has comparatively light regulation of private health insurers. There are no restrictions regarding the percentage of premium revenue that must be paid as benefits. Absent such oversight, non-medical spending in insured group plans offered by for-profit firms has nearly tripled as a percentage of premium income. Furthermore, it appears from the available evidence that these increases are not related to changes in plan design that would benefit plan members. In the long term, increases in the cost of insurance, including both administrative spending and profits, are passed on to individual Canadians.
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Private insurance in the UK
The UK has a mixed healthcare system, with most residents relying on the state-funded National Health Service (NHS). Around 10.6% of residents use private healthcare, which is available to those with private health insurance.
Public healthcare in the UK is tax-funded and residence-based, differing from many other European countries that use public health insurance. All residents can access most NHS services free of charge and don't need any kind of insurance plan. Spending on public healthcare in the UK is currently 9.6% of GDP, and the country ranks 16th on the 2018 Euro Health Consumer Index.
Private healthcare services are usually provided as a top-up to NHS services or are funded by employers through medical insurance as part of an employee benefits package. Most private care is for specialist referrals from the NHS. Private healthcare has reduced waiting times for some patients.
According to LaingBuisson in 2018, the total private acute healthcare market is worth £1.47 billion (excluding consulting or diagnostic work outside hospitals) and 40% of the demand is in London. The inability of the NHS to meet waiting time targets for planned surgery has led to an increase in the number of people paying for private operations. Personal payments for acute medical care increased by 53% between 2012 and 2016, from £454 million to £701 million, excluding cosmetic surgery or costs covered by health insurance.
Private health insurance in the UK is an option for those unable to access the NHS or who want a greater choice of healthcare treatments. It is not compulsory, and many residents don't bother with medical insurance. However, it is advisable for those who want to access a wider range of treatments, avoid waiting times, or enjoy perks such as private hospital rooms. Expats coming to the UK often find it simpler to take out a private plan with an international provider.
The advantages of private health insurance in the UK include:
- Greater choice of GPs and hospital facilities
- A wider range of treatments, including some specialist treatments not available on the NHS (e.g., dental treatments, complementary therapies)
- Shorter waiting times, as services are less crowded
- More exclusive treatments, such as private hospital rooms
The cost of private health insurance in the UK varies depending on the level of coverage and the number of people covered. Basic policies can be found for around £500, while the average annual cost is £1,020.
Canada is the only country that outlaws private care. In other countries with universal, taxpayer-funded healthcare, such as the Nordic countries, private insurance is growing.
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Private insurance in the US
There are various ways for individuals to obtain private health insurance in the US. The most common type of private insurance is employment-based insurance, which covered 54.5% of the population in 2022. Individuals can also purchase private insurance directly from an insurer, known as "nongroup" coverage. Additionally, for those over 65 or with a qualifying disability, Medicare plans are an option, while individuals with lower incomes may qualify for Medicaid.
The cost of private health insurance in the US varies depending on several factors, including age, location, and lifestyle habits. The type of plan chosen also plays a significant role in determining cost. Some plans may have lower upfront costs but higher expenses when receiving care, while others may have higher premiums but lower out-of-pocket costs when utilizing medical services.
The debate around banning private health insurance in the US has been a contentious issue, with only a small number of politicians supporting the idea. Proponents of banning private insurance argue that it would ensure true healthcare equality, where everyone, regardless of income, has access to the same quality of healthcare. However, opponents argue that it would limit individuals' freedom to choose the care they want and that a public system could result in longer wait times and inferior services.
Overall, private insurance in the US plays a significant role in providing individuals with access to healthcare services. The interplay between state and federal regulations, as well as the various sources of private insurance, contribute to a complex and dynamic landscape of private health coverage in the country.
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Pros and cons of banning private insurance
Pros of banning private insurance
- Equality in the healthcare system: everyone would have access to the same healthcare services, regardless of their income.
- Cost-effectiveness: Public health insurance has the potential to save costs through collective negotiations with healthcare providers and lower administrative expenses. This could lead to more affordable premiums and better value for policyholders.
- Focus on preventative care: The aim of preventative care in public health insurance is to maintain the population's well-being and reduce the financial burden of avoidable medical interventions.
Cons of banning private insurance
- Restricted availability of healthcare providers and treatment options: This could limit patients' ability to choose their preferred doctors or hospitals.
- Longer wait times: Due to high demand and limited resources, wait times for non-emergency medical services might be longer in public health insurance systems.
- Government influence: Political decisions can impact public health insurance systems, and changes in government policies can affect the extent of coverage and benefits provided to policyholders.
- Potential for higher taxes: To fund universal healthcare, taxes may need to increase.
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Frequently asked questions
No, other countries that have universal healthcare still allow private insurance.
Private insurance in countries with universal healthcare serves three possible roles: complementary insurance, supplementary insurance, and duplicate insurance. Complementary insurance covers any cost-sharing that exists under the public plan. Supplementary insurance covers services not covered by the public program. Duplicate insurance gives access to a faster and fancier version of basic services, such as same-day appointments with specialists or shorter wait times for elective surgery.
Countries with universal healthcare that also allow private insurance include Canada, the United Kingdom, the Netherlands, Switzerland, Germany, Australia, England, and Denmark.
Some people want to ban private insurance because they see it as putting profits over patients. Others want to ban private insurance to achieve true healthcare equality.
