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. Includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment".
A health insurance policy is:
- A contract between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (e.g. an employer or a community organization). The contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "Evidence of Coverage" booklet for private insurance, or in a national health policy for public insurance.
- Provided by an employer-sponsored self-funded ERISA plan. The company generally advertises that they have one of the big insurance companies. However, in an ERISA case, that insurance company "doesn't engage in the act of insurance", they just administer it. Therefore, ERISA plans are not subject to state laws. ERISA plans are governed by federal law under the jurisdiction of the US Department of Labor (USDOL). The specific benefits or coverage details are found in the Summary Plan Description (SPD). An appeal must go through the insurance company, then to the Employer's Plan Fiduciary. If still required, the Fiduciary's decision can be brought to the USDOL to review for ERISA compliance, and then file a lawsuit in federal court.
The individual insured person's obligations may take several forms:
- Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage.
- Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay a $500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. Furthermore, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible.
- Co-payment: The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $45 co-payment for a doctor's visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.
- Coinsurance: Instead of, or in addition to, paying a fixed amount up front (a co-payment), the co-insurance is a percentage of the total cost that insured person may also pay. For example, the member might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. If there is an upper limit on coinsurance, the policy-holder could end up owing very little, or a great deal, depending on the actual costs of the services they obtain.
- Exclusions: Not all services are covered. The insured are generally expected to pay the full cost of non-covered services out of their own pockets.
- Coverage limits: Some health insurance policies only pay for health care up to a certain dollar amount. The insured person may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some insurance company schemes have annual or lifetime coverage maxima. In these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs.
- Out-of-pocket maxima: Similar to coverage limits, except that in this case, the insured person's payment obligation ends when they reach the out-of-pocket maximum, and health insurance pays all further covered costs. Out-of-pocket maxima can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.
- Capitation: An amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer.
- In-Network Provider: (U.S. term) A health care provider on a list of providers preselected by the insurer. The insurer will offer discounted coinsurance or co-payments, or additional benefits, to a plan member to see an in-network provider. Generally, providers in network are providers who have a contract with the insurer to accept rates further discounted from the "usual and customary" charges the insurer pays to out-of-network providers.
- Prior Authorization: A certification or authorization that an insurer provides prior to medical service occurring. Obtaining an authorization means that the insurer is obligated to pay for the service, assuming it matches what was authorized. Many smaller, routine services do not require authorization.
- Explanation of Benefits: A document that may be sent by an insurer to a patient explaining what was covered for a medical service, and how payment amount and patient responsibility amount were determined.
Prescription drug plans are a form of insurance offered through some health insurance plans. In the U.S., the patient usually pays a copayment and the prescription drug insurance part or all of the balance for drugs covered in the formulary of the plan. Such plans are routinely part of national health insurance programs. For example, in the province of Quebec, Canada, prescription drug insurance is universally required as part of the public health insurance plan, but may be purchased and administered either through private or group plans, or through the public plan.
Some, if not most, health care providers in the United States will agree to bill the insurance company if patients are willing to sign an agreement that they will be responsible for the amount that the insurance company doesn't pay. The insurance company pays out of network providers according to "reasonable and customary" charges, which may be less than the provider's usual fee. The provider may also have a separate contract with the insurer to accept what amounts to a discounted rate or capitation to the provider's standard charges. It generally costs the patient less to use an in-network provider.
Comparison
The Commonwealth Fund, in its annual survey, "Mirror, Mirror on the Wall", compares the performance of the health care systems in Australia, New Zealand, the United Kingdom, Germany, Canada and the U.S. Its 2007 study found that, although the U.S. system is the most expensive, it consistently under-performs compared to the other countries.[6] One difference between the U.S. and the other countries in the study is that the U.S. is the only country without universal health insurance
The Commonwealth Fund completed its thirteenth annual health policy survey in 2010.[8] A study of the survey "found significant differences in access, cost burdens, and problems with health insurance that are associated with insurance design". Of the countries surveyed, the results indicated that people in the United States had more out-of-pocket expenses, more disputes with insurance companies than other countries, and more insurance payments denied; paperwork was also higher although Germany had similarly high levels of paperwork.
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 insurance in Austrailia is funded by a number of private health insurance organizations. The largest of these is Medibank, which was government-owned until 2014 when it was listed on the Australian Stock Exchange.
Some private health insurers in Austrailia 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.[12] 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".
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. 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.
France
The national system of health insurance was instituted in 1945, just after the end of the Second World War. It was a compromise between Gaullist and Communistrepresentatives in the French parliament. The Conservative Gaullists were opposed to a state-run healthcare system, while the Communists were supportive of a completenationalisation of health care along a British Beveridge model.
The resulting programme is profession-based: all people working are required to pay a portion of their income to a not-for-profit health insurance fund, which mutualises the risk of illness, and which reimburses medical expenses at varying rates. Children and spouses of insured people are eligible for benefits, as well. Each fund is free to manage its own budget, and used to reimburse medical expenses at the rate it saw fit, however following a number of reforms in recent years, the majority of funds provide the same level of reimbursement and benefits.
The government has two responsibilities in this system.
- The first government responsibility is the fixing of the rate at which medical expenses should be negotiated, and it does so in two ways: The Ministry of Health directly negotiates prices of medicine with the manufacturers, based on the average price of sale observed in neighboring countries. A board of doctors and experts decides if the medicine provides a valuable enough medical benefit to be reimbursed (note that most medicine is reimbursed, including homeopathy). In parallel, the government fixes the reimbursement rate for medical services: this means that a doctor is free to charge the fee that he wishes for a consultation or an examination, but the social security system will only reimburse it at a pre-set rate. These tariffs are set annually through negotiation with doctors' representative organisations.
- The second government responsibility is oversight of the health-insurance funds, to ensure that they are correctly managing the sums they receive, and to ensure oversight of the public hospital network.
Today, this system is more or less intact. All citizens and legal foreign residents of France are covered by one of these mandatory programs, which continue to be funded by worker participation. However, since 1945, a number of major changes have been introduced. Firstly, the different health-care funds (there are five: General, Independent, Agricultural, Student, Public Servants) now all reimburse at the same rate. Secondly, since 2000, the government now provides health care to those who are not covered by a mandatory regime (those who have never worked and who are not students, meaning the very rich or the very poor). This regime, unlike the worker-financed ones, is financed via general taxation and reimburses at a higher rate than the profession-based system for those who cannot afford to make up the difference. Finally, to counter the rise in health-care costs, the government has installed two plans, (in 2004 and 2006), which require insured people to declare a referring doctor in order to be fully reimbursed for specialist visits, and which installed a mandatory co-pay of 1 € (about $1.45) for a doctor visit, 0,50 € (about 80¢) for each box of medicine prescribed, and a fee of 16–18 € ($20–25) per day for hospital stays and for expensive procedures.
An important element of the French insurance system is solidarity: the more ill a person becomes, the less the person pays. This means that for people with serious or chronic illnesses, the insurance system reimburses them 100% of expenses, and waives their co-pay charges.
Finally, for fees that the mandatory system does not cover, there is a large range of private complementary insurance plans available. The market for these programs is very competitive, and often subsidised by the employer, which means that premiums are usually modest. 85% of French people benefit from complementary private health insurance.
Germany
Main article: Healthcare in Germany
Germany has the world's oldest national social health insurance system, with origins dating back to Otto von Bismarck's Sickness Insurance Law of 1883.
Currently 85% of the population is covered by a basic health insurance plan provided by statute, which provides a standard level of coverage. The remainder opt for private health insurance, which frequently offers additional benefits. According to the World Health Organization, Germany's health care system was 77% government-funded and 23% privately funded as of 2004.
The government partially reimburses the costs for low-wage workers, whose premiums are capped at a predetermined value. Higher wage workers pay a premium based on their salary. They may also opt for private insurance, which is generally more expensive, but whose price may vary based on the individual's health status.
Reimbursement is on a fee-for-service basis, but the number of physicians allowed to accept Statutory Health Insurance in a given locale is regulated by the government and professional societies.
Co payments were introduced in the 1980s in an attempt to prevent over utilization. The average length of hospital stay in Germany has decreased in recent years from 14 days to 9 days, still considerably longer than average stays in the United States (5 to 6 days). Part of the difference is that the chief consideration for hospital reimbursement is the number of hospital days as opposed to procedures or diagnosis. Drug costs have increased substantially, rising nearly 60% from 1991 through 2005. Despite attempts to contain costs, overall health care expenditures rose to 10.7% of GDP in 2005, comparable to other western European nations, but substantially less than that spent in the U.S. (nearly 16% of GDP).
Insurance systems
Germans are offered three kinds of social security insurance dealing with the physical status of a person and which are co-financed by employer and employee: health insurance, accident insurance, and long-term care insurance.
Germany has a universal multi-payer system with two main types of health insurance: law enforced health insurance (or public health insurance) (Gesetzliche Krankenversicherung (GKV)) and private insurance (Private Krankenversicherung (PKV)). Both systems struggle with the increasing cost of medical treatment and the changing demography. About 87.5% of the persons with health insurance are members of the public system, while 12.5% are covered by private insurance (as of 2006). There are many differences between the public health insurance and private insurance. In general the benefits and costs in the private insurance are better for young people without family. There are hard salary requirements to join the private insurance because it is getting more expensive advanced in years.
Statutory health insurance/Gesetzliche Krankenversicherung (GKV)
The statutory health insurance (est. in 1883) is part of the German social insurance system, together with the statutory accident insurance (est. 1883), the statutory old age and disability insurance (est. in 1889), the unemployment insurance (est. in 1927) and the long term care insurance (est. in 1995).
Since 2009, health insurance is mandatory for anyone living in Germany.
The statutory health insurance is a compulsory insurance for employees with a yearly income below €54.900 (in 2015, adjusted annually) and others.
History
With the 'Imperial Bill of 15 June 1883' and its update from 10 April 1892 the health insurance bill was created, which introduced compulsory health insurance for workers. Austria followed Germany in 1888, Hungary in 1891 and Switzerland in 1911.
On 29 April 1869 the county health insurance ill in Bavaria created the first law that introduced and regulated health insurance for low income earners. It was limited to individuals with an income less than 2000 Mark per year and guaranteed the insured person a 60% minimum income during sickness.
Function
Function of the statutory health insurance according to § 1 SGB V is to preserve, recreate or improve health of the insured person. According to § 27 SGB V this includes to "subdue the afflictions of illness".
All insured fundamentally have the same entitlement for benefits. The scope of benefits is regulated in SGB V ("social insurance bill five") and limited by § 1 SGB V. Benefits have to be adequate, appropriate and economic and shall not exceed the necessary for the insured.[32]
Additional benefits can only be granted based on particular regulations based on formal law. These are e.g. additional service for the prevention of sickness, care at home, household support, rehabilitation etc.
Based on the principle of solidarity and compulsory membership, the calculation of fees differs from private health insurance in that it does not depend on personal health or health criteria like age or sex, but is connected to one's personal income by a fixed percentage. The aim is to cover the risk of high cost from illness that an individual can not bear alone.
Organisation
The German legislature has reduced the number of public health insurance organisations from 1209 in 1991 down to 123 in 2015.
The public health insurance organisations (Krankenkassen) are the Ersatzkassen (EK), Allgemeine Ortskrankenkassen (AOK), Betriebskrankenkassen (BKK),Innungskrankenkassen (IKK), Knappschaft (KBS), and Landwirtschaftliche Krankenkasse (LKK).
As long as a person has the right to choose his or her health insurance, he or she can join any insurance that is willing to include the individual.
Private health insurance/Private Krankenversicherung (PKV)
Law enforced accident insurance/gesetzliche Unfallversicherung
Accident insurance (Unfallversicherung) is covered by the employer and basically covers all risks for commuting to work and at the workplace.
Law enforced long term care insurance/Gesetzliche Pflegeversicherung
Long-term care (Pflegeversicherung) is covered half and half by employer and employee and covers cases in which a person is not able to manage his or her daily routine (provision of food, cleaning of apartment, personal hygiene, etc.). It is about 2% of a yearly salaried income or pension, with employers matching the contribution of the employee.
In 2013 a state funded private care insurance was introduced ("Private Pflegeversicherung"). Insurance contracts that fit certain criteria are subsidised with 60 Euro per year. It is expected that the number of contracts will grow from 400,000 by end of 2013 to over a million within the next few years. These contracts have been criticized by consumer rights foundations.
Japan
Main article: Health care in Japan
There are two major types of insurance programs available in Japan – Employees Health Insurance (健康保険 Kenkō-Hoken), and National Health Insurance (国民健康保険 Kokumin-Kenkō-Hoken). National Health insurance is designed for people who are not eligible to be members of any employment-based health insurance program. Although private health insurance is also available, all Japanese citizens, permanent residents, and non-Japanese with a visa lasting one year or longer are required to be enrolled in either National Health Insurance or Employees Health Insurance.
Netherlands
Main article: Health care in the Netherlands
In 2006, a new system of health insurance came into force in the Netherlands. This new system avoids the two pitfalls of adverse selection and moral hazard associated with traditional forms of health insurance by using a combination of regulation and an insurance equalization pool. Moral hazard is avoided by mandating that insurance companies provide at least one policy which meets a government set minimum standard level of coverage, and all adult residents are obliged by law to purchase this coverage from an insurance company of their choice. All insurance companies receive funds from the equalization pool to help cover the cost of this government-mandated coverage. This pool is run by a regulator which collects salary-based contributions from employers, which make up about 50% of all health care funding, and funding from the government to cover people who cannot afford health care, which makes up an additional 5%.
The remaining 45% of health care funding comes from insurance premiums paid by the public, for which companies compete on price, though the variation between the various competing insurers is only about 5%. However, insurance companies are free to sell additional policies to provide coverage beyond the national minimum. These policies do not receive funding from the equalization pool, but cover additional treatments, such as dental procedures and physiotherapy, which are not paid for by the mandatory policy.
Funding from the equalization pool is distributed to insurance companies for each person they insure under the required policy. However, high-risk individuals get more from the pool, and low-income persons and children under 18 have their insurance paid for entirely. Because of this, insurance companies no longer find insuring high risk individuals an unappealing proposition, avoiding the potential problem of adverse selection.
Insurance companies are not allowed to have co-payments, caps, or deductibles, or to deny coverage to any person applying for a policy, or to charge anything other than their nationally set and published standard premiums. Therefore, every person buying insurance will pay the same price as everyone else buying the same policy, and every person will get at least the minimum level of coverage.
New Zealand
Since 1974, New Zealand has had a system of universal no-fault health insurance for personal injuries through the Accident Compensation Corporation (ACC). The ACC scheme covers most of the costs of related to treatment of injuries acquired in New Zealand (including overseas visitors) regardless of how the injury occurred, and also covers lost income (at 80 percent of the employee's pre-injury income) and costs related to long-term rehabilitation, such as home and vehicle modifications for those seriously injured. Funding from the scheme comes from a combination of levies on employers' payroll (for work injuries), levies on an employee's taxable income (for non-work injuries to salary earners), levies on vehicle licensing fees and petrol (for motor vehicle accidents), and funds from the general taxation pool (for non-work injuries to children, senior citizens, unemployed people, overseas visitors, etc.)
Rwanda
Rwanda is one of a handful of low income countries that has implemented community-based health insurance schemes in order to reduce the financial barriers that prevent poor people from seeking and receiving needed health services. This scheme has helped reach 90% of the country's population with health-care coverage.
Switzerland
Main article: Health insurance in Switzerland
Healthcare in Switzerland is universal and is regulated by the Swiss Federal Law on Health Insurance. Health insurance is compulsory for all persons residing in Switzerland(within three months of taking up residence or being born in the country). It is therefore the same throughout the country and avoids double standards in healthcare. Insurers are required to offer this basic insurance to everyone, regardless of age or medical condition. They are not allowed to make a profit off this basic insurance, but can on supplemental plans.
The universal compulsory coverage provides for treatment in case of illness or accident and pregnancy. Health insurance covers the costs of medical treatment, medication and hospitalization of the insured. However, the insured person pays part of the costs up to a maximum, which can vary based on the individually chosen plan, premiums are then adjusted accordingly. The whole healthcare system is geared towards to the general goals of enhancing general public health and reducing costs while encouraging individual responsibility.
The Swiss healthcare system is a combination of public, subsidised private and totally private systems. Insurance premiums vary from insurance company to company, the excess level individually chosen (franchise), the place of residence of the insured person and the degree of supplementary benefit coverage chosen (complementary medicine, routine dental care, semi-private or private ward hospitalisation, etc.).
The insured person has full freedom of choice among the approximately 60 recognised healthcare providers competent to treat their condition (in his region) on the understanding that the costs are covered by the insurance up to the level of the official tariff. There is freedom of choice when selecting an insurance company to which one pays a premium, usually on a monthly basis. The insured person pays the insurance premium for the basic plan up to 8% of their personal income. If a premium is higher than this, the government gives the insured person a cash subsidy to pay for any additional premium.
The compulsory insurance can be supplemented by private "complementary" insurance policies that allow for coverage of some of the treatment categories not covered by the basic insurance or to improve the standard of room and service in case of hospitalisation. This can include complementary medicine, routine dental treatment and private ward hospitalisation, which are not covered by the compulsory insurance.
As far as the compulsory health insurance is concerned, the insurance companies cannot set any conditions relating to age, sex or state of health for coverage. Although the level of premium can vary from one company to another, they must be identical within the same company for all insured persons of the same age group and region, regardless of sex or state of health. This does not apply to complementary insurance, where premiums are risk-based.
Switzerland has an infant mortality rate of about 3.6 out of 1,000. The general life expectancy in 2012 was for men 80.5 years compared to 84.7 years for women. These are the world's best figures!
United Kingdom
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,Best health insurance is Uk is very good 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.Best health insurance is Uk is very good .
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:
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 Best health insurance is Uk is very good 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.
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 incy 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.
History and evolution
In the late 19th century, "accident insurance" began to be available, which operated much like modern disability insurance. This payment model continued until the start of the 20th century in some jurisdictions (like California), where all laws regulating health insurance actually referred to disability insurance.
Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents. Sixty organizations were offering accident insurance in the U.S. by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in the U.S. effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911.
Before the development of medical expense insurance, patients were expected to pay health care costs out of their own pockets, under what is known as the fee-for-servicebusiness model. During the middle-to-late 20th century, traditional disability insurance evolved into modern health insurance programs. One major obstacle to this development was that early forms of comprehensive health insurance were enjoined by courts for violating the traditional ban on corporate practice of the professions by for-profit corporations. State legislatures had to intervene and expressly legalize health insurance as an exception to that traditional rule. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and emergency health care procedures, and most prescription drugs (but this is not always the case).
Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began offering services to individuals on a pre-paid basis, eventually leading to the development of Blue Cross organizations. The predecessors of today's Health Maintenance Organizations (HMOs) originated beginning in 1929, through the 1930s and on during World War II.
Tips to pick the right health cover to suit your needs-
It takes an agent several days, even weeks, to convince a customer to buy health insurance. Yet, 10 minutes at the billing counter of a hospital were enough.
When the Delhi-based professional visited a friend, who had undergone a minor surgery in a private hospital last month, he was shocked to see the bill at the time of discharge.
"A simple operation and one night's hospitalisation cost him Rs 1.4 lakh. The cover from his employer covered only Rs 50,000 of the cost," he says.
We are not surprised. Healthcare costs are rising at a fast clip. According to a survey by insurance consultancy firm, Towers Watson India, healthcare costs in India increased by 13.25% in 2011.
The rate of increase in 2012 is estimated to be roughly at the same level. The culprits: introduction of new medical technologies, over-prescription by doctors, and a general rise in medicine costs.
Says Antony Jacob, CEO of Apollo Munich Health Insurance: "The treatment protocol for angioplasty today is vastly different from that followed five years ago. Many of these advanced medical technologies and procedures cost more."
Sharma is now looking for a health insurance policy for his family. However, the vast array of choices before him is confusing.
There are individual policies and family floater plans, policies that restore the limit after the claim and plans that cover critical illnesses or offer cash benefits on hospitalisation. How does one pick a suitable plan from this clutter?
The answer is that your needs should define the type of policy you buy. Each type of health insurance policy fulfils a certain need (see graphic).
The choice depends on the buyer's age, family size and structure, and existing insurance cover.
ET Wealth looks at various situations and the health insurance policies that are best suited to these circumstances.
Young nuclear family
If you have a nuclear family, a family floater plan will suit you best. In these plans, the cover is shared by the entire family. The premium per Rs 1 lakh may be higher compared with an individual policy, but the premium per person works out to be lower.
It's a calculated risk you can safely take. It is unlikely that all the members will require hospitalisation in the same year.
For newly married couples, who intend to start a family in a few years, it makes sense to plan accordingly. Though most health insurance policies do not cover maternity costs, some do. However, these costs are covered only after a waiting period of 2-3 years.
Covered by employer
Some people believe that if they are covered by their employer, they don't need to buy a separate policy. This can be a costly mistake. While such covers are useful, they may not be sufficient. If you lose your job or switch to another company, you may be rendered uninsured. Even if you buy a fresh cover immediately, keep in mind that there is a mandatory 45-day cooling period during which certain claims will not be paid.
Besides, there is a 2-3 year waiting period for pre-existing diseases. This is where the employer-provided cover is very handy, points out Roopam Asthana, CEO and wholetime director at Liberty Videocon General Insurance. The waiting period for a pre-existing diseases cover is taken care of by the group cover.
While supplementing an existing cover, you can either buy a normal policy or a topup plan. A top-up policy is cheaper because it will cover expenses beyond a certain initial threshold. For instance, Sharma, his wife and child already have a Rs 2 lakh health cover from their employers. They should ideally supplement this cover with a top-up policy. If they buy a normal cover of Rs 5 lakh, their premium will be at least Rs 10,000 per year. However, if they buy a top-up cover of Rs 5 lakh with a Rs 2 lakh deductible, it will cost them only Rs 4,100 a year, a saving of Rs 5,900 per year. Their existing policies can take care of the initial Rs 2 lakh, which won't be covered by the top-up plan. Let us look at some other situations.
Self-employed or businessperson
Health insurance is especially important for people not in formal employment. For them, a simple indemnity plan that covers hospitalisation expenses will not be enough. They also need to insure themselves against loss of income due to hospitalisation.
Most salaried people get paid medical leave, but if your company does not offer this benefit, a fixed benefit plan comes to the rescue. Self-employed professionals should supplement the base cover with a fixed benefit policy, which pays them a certain amount for the period that they are out of action.
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