Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system
expenses, among a targeted group, an insurer can develop a routine
finance structure, such as a monthly premium or payroll tax, to ensure
that money is available to pay for the health care benefits specified in
the insurance agreement. The benefit is administered by a central
organization such as a government agency, private business, or
not-for-profit entity. According to the Health Insurance Association of America,
health insurance is defined as "coverage that provides for the payments
of benefits as a result of sickness or injury. It includes insurance
for losses from accident, medical expense, disability, or accidental
death and dismemberment" .
United States
Main articles: Health insurance in the United States and Health care in the United States
The United States health care system relies heavily on private health
insurance, which is the primary source of coverage for most Americans.
As of 2012 about 61% of Americans had private health insurance according to the Centers for Disease Control and Prevention. The Agency for Healthcare Research and Quality
(AHRQ) found that in 2011, private insurance was billed for 12.2
million U.S. inpatient hospital stays and incurred approximately $112.5
billion in aggregate inpatient hospital costs (29% of the total national
aggregate costs).
Public programs provide the primary source of coverage for most senior
citizens and for low-income children and families who meet certain
eligibility requirements. The primary public programs are Medicare, a federal social insurance program for seniors and certain disabled individuals; and Medicaid,
funded jointly by the federal government and states but administered at
the state level, which covers certain very low income children and
their families. Together, Medicare and Medicaid accounted for
approximately 63 percent of the national inpatient hospital costs in
2011.SCHIP
is a federal-state partnership that serves certain children and
families who do not qualify for Medicaid but who cannot afford private
coverage. Other public programs include military health benefits
provided through TRICARE and the Veterans Health Administration and benefits provided through the Indian Health Service. Some states have additional programs for low-income individuals.
In the late 1990s and early 2000s, health advocacy
companies began to appear to help patients deal with the complexities
of the healthcare system. The complexity of the healthcare system has
resulted in a variety of problems for the American public. A study found
that 62 percent of persons declaring bankruptcy in 2007 had unpaid
medical expenses of $1000 or more, and in 92% of these cases the medical debts exceeded $5000. Nearly 80 percent who filed for bankruptcy had health insurance. The Medicare and Medicaid programs were estimated to soon account for 50 percent of all national health spending.
These factors and many others fueled interest in an overhaul of the
health care system in the United States. In 2010 President Obama signed
into law the Patient Protection and Affordable Care Act.
This Act includes an 'individual mandate' that every American must have
medical insurance (or pay a fine). Health policy experts such as David Cutler and Jonathan Gruber, as well as the American medical insurance lobby group America's Health Insurance Plans,
argued this provision was required in order to provide "guaranteed
issue" and a "community rating," which address unpopular features of
America's health insurance system such as premium weightings, exclusions
for pre-existing conditions, and the pre-screening of insurance
applicants. During March 26–28, the Supreme Court heard arguments
regarding the validity of the Act. The Patient Protection and Affordable
Care Act was determined to be constitutional on June 28, 2012. SCOTUS
determined that Congress had the authority to apply the individual
mandate within its taxing powers.
United Kingdom
Main article: National Health Service (England)
The UK's National Health Service (NHS) is a publicly funded healthcare
system that provides coverage to everyone normally resident in the UK.
It is not strictly an insurance system because (a) there are no premiums
collected, (b) costs are not charged at the patient level and (c) costs
are not pre-paid from a pool. However, it does achieve the main aim of
insurance which is to spread financial risk arising from ill-health. The
costs of running the NHS (est. £104 billion in 2007-8) are met directly from general taxation. The NHS provides the majority of health care in the UK, including primary care, in-patient care, long-term health care, ophthalmology, and dentistry.
Private health care has continued parallel to the NHS, paid for
largely by private insurance, but it is used by less than 8% of the
population, and generally as a top-up to NHS services. There are many
treatments that the private sector does not provide. For example, health
insurance on pregnancy is generally not covered or covered with restricting clauses. Typical exclusions for Bupa schemes (and many other insurers) include:
ageing, menopause and puberty; AIDS/HIV; allergies or allergic
disorders; birth control, conception, sexual problems and sex changes;
chronic conditions; complications from excluded or restricted
conditions/ treatment; convalescence, rehabilitation and general nursing
care ; cosmetic, reconstructive or weight loss treatment; deafness;
dental/oral treatment (such as fillings, gum disease, jaw shrinkage,
etc); dialysis; drugs and dressings for out-patient or take-home use† ;
experimental drugs and treatment; eyesight; HRT and bone densitometry;
learning difficulties, behavioural and developmental problems; overseas
treatment and repatriation; physical aids and devices; pre-existing or
special conditions; pregnancy and childbirth; screening and preventive
treatment; sleep problems and disorders; speech disorders; temporary
relief of symptoms.[48] († = except in exceptional circumstances)
There are a number of other companies in the United Kingdom which include, among others, ACE Limited, AXA, Aviva, Bupa, Groupama Healthcare, WPA and PruHealth. Similar exclusions apply, depending on the policy which is purchased.
Recently (2009) the main representative body of British Medical
physicians, the British Medical Association, adopted a policy statement
expressing concerns about developments in the health insurance market in
the UK. In its Annual Representative Meeting which had been agreed
earlier by the Consultants Policy Group (i.e. Senior physicians) stating
that the BMA was "extremely concerned that the policies of some private
healthcare insurance companies are preventing or restricting patients
exercising choice about (i) the consultants who treat them; (ii) the
hospital at which they are treated; (iii) making top up payments to
cover any gap between the funding provided by their insurance company
and the cost of their chosen private treatment." It went in to "call on
the BMA to publicise these concerns so that patients are fully informed
when making choices about private healthcare insurance."
The practice of insurance companies deciding which consultant a patient
may see as opposed to GPs or patients is referred to as Open Referral. The NHS offers patients a choice of hospitals and consultants and does not charge for its services.
The private sector has been used to increase NHS capacity despite a
large proportion of the British public opposing such involvement. According to the World Health Organization,
government funding covered 86% of overall health care expenditures in
the UK as of 2004, with private expenditures covering the remaining 14%.
Nearly one in three patients receiving NHS hospital treatment is
privately insured and could have the cost paid for by their insurer.
Some private schemes provide cash payments to patients who opt for NHS
treatment, to deter use of private facilities. A report, by private
health analysts Laing and Buisson, in November 2012, estimated that more
than 250,000 operations were performed on patients with private medical
insurance each year at a cost of £359 million. In addition, £609
million was spent on emergency medical or surgical treatment. Private
medical insurance does not normally cover emergency treatment but
subsequent recovery could be paid for if the patient were moved into a
private patient unit.
Canada
Main article: Health care in Canada
Health care is mainly a constitutional, provincial government
responsibility in Canada (the main exceptions being federal government
responsibility for services provided to aboriginal peoples covered by
treaties, the Royal Canadian Mounted Police, the armed forces, and
members of parliament). Consequently, each province administers its own
health insurance program. The federal government influences health
insurance by virtue of its fiscal powers – it transfers cash and tax
points to the provinces to help cover the costs of the universal health
insurance programs. Under the Canada Health Act, the federal government
mandates and enforces the requirement that all people have free access
to what are termed "medically necessary services," defined primarily as
care delivered by physicians or in hospitals, and the nursing component
of long term residential care. If provinces allow doctors or
institutions to charge patients for medically necessary services, the
federal government reduces its payments to the provinces by the amount
of the prohibited charges. Collectively, the public provincial health
insurance systems in Canada are frequently referred to as Medicare.
This public insurance is tax-funded out of general government revenues,
although British Columbia and Ontario levy a mandatory premium with
flat rates for individuals and families to generate additional revenues –
in essence a surtax. Private health insurance is allowed, but in six
provincial governments only for services that the public health plans do
not cover, for example, semi-private or private rooms in hospitals and
prescription drug plans. Four provinces allow insurance for services
also mandated by the Canada Health Act, but in practice there is no
market for it. All Canadians are free to use private insurance for
elective medical services such as laser vision correction surgery,
cosmetic surgery, and other non-basic medical procedures. Some 65% of
Canadians have some form of supplementary private health insurance; many
of them receive it through their employers.[15] Private-sector services not paid for by the government account for nearly 30 percent of total health care spending.
In 2005, the Supreme Court of Canada ruled, in Chaoulli v. Quebec,
that the province's prohibition on private insurance for health care
already insured by the provincial plan violated the Quebec Charter of
Rights and Freedoms, and in particular the sections dealing with the right to life and security,
if there were unacceptably long wait times for treatment, as was
alleged in this case. The ruling has not changed the overall pattern of
health insurance across Canada but has spurred on attempts to tackle the
core issues of supply and demand and the impact of wait times.
Australia
Main article: Health care in Australia
The public health system is called Medicare.
It ensures free universal access to hospital treatment and subsidised
out-of-hospital medical treatment. It is funded by a 1.5% tax levy on
all taxpayers, an extra 1% levy on high income earners, as well as
general revenue.
The private health system is funded by a number of private health insurance organizations. The largest of these is Medibank Private Limited, which was, until 2014, a government-owned entity, when it was privatized and listed on the Australian Stock Exchange.
Some private health insurers are 'for profit' enterprises such as Australian Unity, and some are non-profit organizations such as HCF
and the HBF Health Fund (HBF). Some have membership restricted to
particular groups, but the majority have open membership. Membership to
most health funds is now also available through comparison websites like
moneytime, Comparethemarket.com, iSelect Ltd., Choosi and YouCompare.
These comparison sites operate on a commission-basis by agreement with
their participating health funds. The Private Health Insurance Ombudsman
also operates a free website which allows consumers to search for and
compare private health insurers' products, which includes information on
price and level of cover.
Most aspects of private health insurance in Australia are regulated by the Private Health Insurance Act 2007. Complaints and reporting of the private health industry is carried out by an independent government agency, the Private Health Insurance Ombudsman.
The ombudsman publishes an annual report that outlines the number and
nature of complaints per health fund compared to their market share .
The private health system in Australia operates on a "community
rating" basis, whereby premiums do not vary solely because of a person's
previous medical history, current state of health, or (generally
speaking) their age (but see Lifetime Health Cover below). Balancing
this are waiting periods, in particular for pre-existing conditions
(usually referred to within the industry as PEA, which stands for
"pre-existing ailment"). Funds are entitled to impose a waiting period
of up to 12 months on benefits for any medical condition the signs and
symptoms of which existed during the six months ending on the day the
person first took out insurance. They are also entitled to impose a
12-month waiting period for benefits for treatment relating to an
obstetric condition, and a 2-month waiting period for all other benefits
when a person first takes out private insurance.
Funds have the
discretion to reduce or remove such waiting periods in individual cases.
They are also free not to impose them to begin with, but this would
place such a fund at risk of "adverse selection", attracting a
disproportionate number of members from other funds, or from the pool of
intending members who might otherwise have joined other funds. It would
also attract people with existing medical conditions, who might not
otherwise have taken out insurance at all because of the denial of
benefits for 12 months due to the PEA Rule. The benefits paid out for
these conditions would create pressure on premiums for all the fund's
members, causing some to drop their membership, which would lead to
further rises in premiums, and a vicious cycle of higher
premiums-leaving members would ensue.
The Australian government has introduced a number of incentives to
encourage adults to take out private hospital insurance. These include:
- Lifetime Health Cover: If a person has not taken out private
hospital cover by 1 July after their 31st birthday, then when (and if)
they do so after this time, their premiums must include a loading of 2%
per annum for each year they were without hospital cover. Thus, a person
taking out private cover for the first time at age 40 will pay a 20
percent loading. The loading is removed after 10 years of continuous
hospital cover. The loading applies only to premiums for hospital cover,
not to ancillary (extras) cover.
-
- Medicare Levy Surcharge: People whose taxable income is
greater than a specified amount (in the 2011/12 financial year $80,000
for singles and $168,000 for couples[11])
and who do not have an adequate level of private hospital cover must
pay a 1% surcharge on top of the standard 1.5% Medicare Levy. The
rationale is that if the people in this income group are forced to pay
more money one way or another, most would choose to purchase hospital
insurance with it, with the possibility of a benefit in the event that
they need private hospital treatment – rather than pay it in the form of
extra tax as well as having to meet their own private hospital costs.
-
- The Australian government announced in May 2008 that it proposes to
increase the thresholds, to $100,000 for singles and $150,000 for
families. These changes require legislative approval. A bill to change
the law has been introduced but was not passed by the Senate.
An amended version was passed on 16 October 2008. There have been
criticisms that the changes will cause many people to drop their private
health insurance, causing a further burden on the public hospital
system, and a rise in premiums for those who stay with the private
system. Other commentators believe the effect will be minimal.
- Private Health Insurance Rebate: The government subsidises
the premiums for all private health insurance cover, including hospital
and ancillary (extras), by 10%, 20% or 30%, depending on age. The Rudd
Government announced in May 2009 that as of July 2010, the Rebate would
become means-tested, and offered on a sliding scale. While this move
(which would have required legislation) was defeated in the Senate at
the time, in early 2011 the Gillard Government announced plans to
reintroduce the legislation after the Opposition loses the balance of
power in the Senate. The ALP and Greens have long been against the rebate, referring to it as "middle-class welfare".
