by Deborah Ng
Health insurance today offers both protection from the high costs of medical care and access to routine and preventive care. Healthcare reform in the U.S. required all plans to fully cover preventive care to encourage good health. When you and your place of employment pay into a health insurance plan, it means that hospital stays, doctor visits, prescriptions and other medical costs are covered if you have an emergency. Thus, health insurance offers financial protection so you don’t lose everything after covering the cost of medical bills.
Currently, most health insurance in the U.S. is provided through employer-sponsored programs into which employees pay for individual or family coverage. Employers generally contribute towards the plans so employees don't bear the entire burden of cost. However, not everyone has employer sponsored healthcare coverage. And for lower income families, health insurance can be difficult to afford, even with employer assistance. Because of this, the U.S. government has been looking into different options to provide affordable healthcare for all individuals and families.
Universal Health Coverage
With universal coverage, all individuals receive access to healthcare services, including preventative, emergency and palliative care, without it becoming a financial hardship. With this type of plan, coverage is provided by different entities. For example, residents can choose from a pool of insurance companies to pay for their healthcare. The problem, though, is that this type of healthcare isn't free. So if the individual or employer isn't picking up the tab, who is?
One suggestion to cover the costs of universal healthcare is to use a special payroll or income tax, which would be combined into a pool to pay healthcare providers. Another option would be to require all individuals to purchase a health insurance policy, with government assistance available to those with limited incomes.
Single-Payer Health Coverage
Under a single-payer healthcare system, everyone receives comprehensive coverage regardless of their ability to pay. The government is the only entity paying for the coverage, most likely funded through taxes. In this system, the term "single-payer" refers to the government. A good example of this type of single-payer, government-funded coverage is Medicare. In fact, you may have heard the term "Medicare for All" in reference to the idea of a single-payer healthcare available for all ages in the U.S.
One concern with a single-payer system is that government funding is limited, so often there are limits on what services are covered. Canada uses a single-payer system, but many residents purchase additional, supplemental coverage.
Which is Better?
Universal vs single-payer coverage is in the news often lately as the U.S. government works to find an affordable and effective solution to the country's healthcare problem. There are pros and cons for each type of coverage, and it's hard to say which is better. Because a universal system doesn't rely solely on government funding, it can provide better coverage for each individual. On the other hand, with a single-payer system, individual coverage is limited and most people would have to pay to supplement their insurance.
Single-payer coverage could lower healthcare costs because administrative expenses are much lower for a government-funded system than for a private insurer. Also, with no competing insurance companies, there's less money spent on marketing and advertising. Finally, the government is able to reimburse providers a lower cost for services than a private insurer.
A problem with both universal and single-payer health coverage is whether or not the government will have to raise taxes in order to fund it. While most people in America want to have an affordable healthcare solution, very few people are willing to pay more taxes to get it done.
The debate over universal versus single-payer health coverage isn't over. Hopefully, an effective solution will become available soon.
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Vladeck, Bruce. American Journal of Public Health, © American Journal of Public Health 2003, Jan. 2003, www.ncbi.nlm.nih.gov/pmc/articles/PMC1447684/.
“What Is Universal Coverage?” World Health Organization, World Health Organization, www.who.int/health_financing/universal_coverage_definition/en/