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Who is covered and how is insurance financed?

  • Australia

    Publicly financed health insurance: Total health expenditures in 2014–2015 represented 10.0 percent of GDP, an increase of 2.8 percent from 2013–2014. Two-thirds of these expenditures (67.0%) came from government.

    The federal government funds Medicare, a universal public health insurance program providing free or subsidized access to care for Australian citizens, residents with a permanent visa, and New Zealand citizens following their enrollment in the program and confirmation of identity. Restricted access is provided to citizens of certain other countries through formal agreements. Other visitors to Australia do not have access to Medicare. Medicare is funded in part by a government levy collected through the tax system, which raised an estimated AUD10.3 billion (USD6.7 billion) in 2013–2014. (In July 2014, the levy was expanded to raise funds for disability care.)

    Private health insurance: Private health insurance (PHI) is readily available and offers more choice of providers (particularly in hospitals), faster access for nonemergency services, and rebates for selected services. Government policies encourage enrollment in PHI through a tax rebate and, above a certain income, a penalty payment for not having PHI (the Medicare Levy surcharge). The Lifetime Health Coverage program provides a lower premium for life if participants sign up before age 31. For people who do not sign up, there is a 2 percent increase in the base premium for each year after age 30. Consequently, take-up is highest among those 30 and under but rapidly drops off as age increases, with a trend to opt out starting at age 50.

    Nearly half of the Australian population (47%) had private hospital coverage and nearly 56 percent had general treatment coverage in 2016.

    Insurers are a mix of for-profit and nonprofit providers. In 2014–2015, private health insurance expenditures represented 8.7 percent of all health spending.

    Private health insurance can include coverage for hospital care, general treatment, or ambulance services. When accessing 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). For private patients, insurance covers the Medicare Benefits Scheme (MBS) fee. If a provider charges above the MBS fee, the consumer will bear the gap cost unless they have gap coverage. The patient may also be charged for costs such as hospital accommodation, surgery fees (implants and theater fees), and diagnostic tests.

    General 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.

    Private health insurance coverage varies by socioeconomic status. PHI covers just one in five (22.1%) of the most disadvantaged 20 percent of the population, a proportion that rises to more than 57.2 percent for the most advantaged population quintile. This disparity is due in part to the Medicare Levy surcharge applied to higher-income earners.

  • Canada

    Publicly financed health care: Total and publicly funded health expenditures were forecast to account for an estimated 11.1 percent and 8.0 percent of GDP, respectively, in 2016; by that measure, 69.8 percent of total health spending comes from public sources. The provinces and territories administer their own universal health insurance programs, covering all provincial and territorial residents in accordance with their own residency requirements. Temporary legal visitors, undocumented immigrants, those 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 provincial program, although provinces and territories provide some limited services.

    The main funding sources are general provincial and territorial spending, which was forecast to constitute 93 percent of public health spending in 2016. The federal government contributes cash funding to the provinces and territories on a per capita basis through the Canada Health Transfer, which will total an estimated CAD36 billion (USD28.8 billion) in 2016–2017, accounting for an estimated 24 percent of total provincial and territorial health expenditures.

    Private health insurance: Private insurance, held by about two-thirds of Canadians, covers services excluded from public reimbursement, such as vision and dental care, prescription drugs, rehabilitation services, home care, and private rooms in hospitals. In 2014, approximately 94 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 2014, private insurance accounted for approximately 12 percent of total health spending. The majority of insurers are for-profit.

  • Switzerland

    Publicly financed health insurance: There are three streams of public funding:

    1. Direct financing for health care providers through tax-financed budgets for the Swiss Confederation, cantons, and municipalities. The largest portion of this spending is given as cantonal subsidies to hospitals providing inpatient acute care.
    2. Mandatory health insurance (MHI) premiums.
    3. Social insurance contributions from health-related coverage of accident insurance, old-age insurance, disability insurance, and military insurance.

    All government expenditures on health are financed by general taxation. In 2014, direct spending by government accounted for 20.1 percent of total health expenditures (CHF71.2 billion, or USD55.8 billion), while income-based MHI subsidies accounted for an additional 5.6 percent. Including MHI premiums (31.0% of total health expenditure, excluding statutory subsidies), other social insurance schemes (6.3%), and old-age and disability benefits (4.4%), publicly financed health care accounted for 67.4 percent of all spending.

    Mandatory MHI coverage is universal. Residents are legally required to purchase MHI within three months of arrival in Switzerland, and it then applies retroactively to the arrival date. Insurance policies typically apply to the individual, are not sponsored by employers, and must be purchased separately for dependents. There are virtually no uninsured residents. Temporary nonresident visitors pay for care up front and must claim expenses from any coverage they may hold in their home country. The absence of MHI for undocumented immigrants remains an unsolved problem acknowledged by the Swiss Federal Council (SFC), the highest governing and executive authority.

    MHI is offered by competing nonprofit insurers supervised by the Federal Office of Public Health (FOPH), which sets floors for premiums calculated to cover past, current, and estimated future costs for insured individuals in a given region. Cantonal average annual premiums in 2016 for adults with the minimum deductible (CHF300, or USD235), the standard insurance model, and accident coverage range from CHF3,920 (USD3,074), for Appenzell Innerrhoden, to CHF6,547 (USD5,134), for Basel-Stadt. Funds are redistributed among insurers by a central fund, in accordance with a risk equalization scheme adjusted for canton, age, gender, and hospital or nursing home stays of more than three consecutive days in the previous year.

    Insurers offer premiums for defined geographical “premium regions” limited to three per canton. Within every region, the criteria for variation in premiums are limited to age group, level of deductible, and alternative insurance plans (so-called managed care plans with the main characteristic of giving up free choice of first medical contact), but variations in premiums among insurers can be significant. In 2014, 63.0 percent of residents opted for basic coverage with a health maintenance organization, an independent practice association, or a fee-for-service plan with gatekeeping provisions.

    Private health insurance: Private expenditure accounted for 32.6 percent of total health expenditure in 2014, which is high by comparison with other OECD countries. There is complementary voluntary health insurance (VHI, 7.2% of total expenditure) for services not covered in the basic basket of MHI and supplementary coverage for free choice of hospital doctor or for a higher level of hospital accommodation. No data are available on the number of people covered by these plans.

    VHI is regulated by the Swiss Financial Market Supervisory Authority (FINMA). 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 MHI and a for-profit branch offering VHI. 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.

  • China

    Generally, health insurance is publicly provided and financed by local governments.

    Publicly financed health insurance: In 2014, China spent approximately 5.6 percent of its gross domestic product (CNY3,531 billion, or USD992 billion) on health care, with 30 percent financed by the central government and local governments and 38 percent by publicly financed health insurance, private health insurance, or social health donations. There were three main types of publicly financed insurance: 1) urban employment-based basic medical insurance (launched in 1998); 2) urban resident basic medical insurance (launched in 2009); and 3) the “new cooperative medical scheme” for rural residents (launched in 2003).

    Urban employment-based basic medical insurance is financed mainly from employee and employer payroll taxes, with minimal government funding. Participation is mandatory for employees in urban areas; the insured population was 283.3 million in 2014. Employees’ nonemployed family members are not covered. Urban resident basic medical insurance, which is voluntary at the household level, covered 314.5 million self-employed individuals, children, students, and elderly adults in 2014. Both urban employment-based and urban resident basic medical insurance are administered by the Ministry of Human Resources and Social Security and run by local authorities. The rural new cooperative medical scheme, administered mainly by the National Health and Family Planning Commission and run by local authorities, is also voluntary at the household level and covered a rural population of 736 million in 2014, representing a coverage rate of 98.9 percent of rural residents.

    Urban resident basic insurance and the new cooperative medical scheme are financed mainly by government, with minimal individual premium contributions. In regions where the economy is less developed, the central government provides the largest share of subsidies, with provincial and prefectural governments accounting for the rest. In more-developed provinces, most subsidies are locally provided (mainly by provincial government).

    The financing strategies and coverage benefits of urban resident basic insurance and the rural cooperative medical scheme are similar. In 2016, China’s central government, the State Council, announced that it will merge the two, with the expectation that doing so will expand the risk pool and reduce administrative costs. Each province was required to make merging arrangements by June 2016; prefectures and cities need to have developed implementation plans by December 2016.

    Coverage by publicly financed health insurance is near-universal—exceeding 95 percent of the population since 2011. The few permanent foreign residents are entitled to the same coverage benefits as citizens. Undocumented immigrants (there are very few) and visitors are not covered by publicly financed health insurance.

    Private health insurance: Complementary private health insurance is purchased to cover deductibles, copayments, and other cost-sharing, as well as coverage gaps, in publicly financed health insurance, which serves as the primary coverage source for most people. Private health insurance is also called commercial health insurance, because it is provided mainly by for-profit commercial insurance companies. The total of collected private health insurance premiums increased from CNY67.7 billion (USD19.0 billion) in 2010 to CNY241.0 billion (USD67.7 billion) in 2015, representing an annual growth rate of 28.9 percent. In 2015, private health insurance premiums accounted for 9.9 percent of total premiums collected in the entire insurance industry, or 5.9 percent of total health expenditures.

    Purchased primarily by higher-income individuals and by employers for their workers, private insurance often enables people to receive a better quality of care and higher reimbursement, as some health services are very expensive or are not covered by public insurance. There are currently no statistics on the percentage of the population with private coverage, but the Chinese government is encouraging development of this market. Growth in private coverage has been rapid, with some foreign insurance companies recently entering the market.

  • Denmark

    Publicly financed health care: Public expenditures in 2015 accounted for 84.2 percent of total health spending, representing 10.6 percent of GDP in 2015. It should be noted, however, that Danish cost reporting with regard to the “gray zone” of long-term care tends to include more activities (services) than reporting requirements do in many other member countries of the Organisation for Economic Co-operation and Development (OECD).

    All registered Danish residents are automatically entitled to publicly financed health care, which is largely free at the point of use. In principle, undocumented immigrants and visitors are not covered, but a voluntary, privately funded initiative by Danish doctors, supported by the Danish Red Cross and Danish Refugee Aid, provides this population with access to care.

    Health care is financed mainly through a national health tax, set at 8 percent of taxable income. Revenues are allocated to regions and municipalities, mostly as block grants, with amounts adjusted for demographic and social differences; these grants finance 77 percent of regional activities. A minor portion of state funding for regional and municipal services is activity-based or tied to specific priority areas, usually defined in the annual economic agreements between the national government and the municipalities or regions. The remaining 20 percent of financing for regional services comes from municipal activity-based payments, which are financed through a combination of local taxes and block grants.

    Private health insurance: Complementary voluntary insurance, purchased on an individual basis, covers statutory copayments—mainly for pharmaceuticals and dental care—and services not fully covered by the state (e.g., physiotherapy). Some 2.2 million Danes have such coverage, which is provided almost exclusively by the not-for-profit organization Danmark.

    In addition, nearly 1.5 million people hold supplementary insurance to gain expanded access to private providers. Policies are purchased mostly from among seven for-profit insurers and 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 2013, and private insurance accounted for about 12 percent of total private expenditures.

  • Germany

    Publicly financed health insurance: In 2014, total health expenditure was 11.2 percent of GDP, of which 74 percent was public, mainly the statutory health insurance (SHI) spending (58% of total). General tax-financed federal spending on “extraneous benefits” provided by SHI, such as coverage for children, amounted to about 4.5 percent of total expenditure in 2014. Sickness funds are financed by compulsory contributions levied as a percentage of gross wages up to a ceiling. Coverage is universal for all legal residents. All employed citizens (and other groups such as pensioners) earning less than EUR56,250 (USD71,564) per year as of 2016 are mandatorily covered by SHI, and their nonearning dependents are covered free of charge. Individuals whose gross wages exceed the threshold and the previously SHI-insured self-employed can remain in the publicly financed scheme on a voluntary basis (as 75% do) or purchase substitutive PHI, which also covers civil servants. About 86 percent of the population receive their primary coverage through SHI and 11 percent through substitutive private health insurance (PHI). Military members, police, and other public-sector employees are covered under special programs. Visitors are not covered through German SHI. Refugees and undocumented immigrants are covered by social security in case of acute illness and pain, as well as pregnancy and childbirth.

    As of 2016, the legally set uniform contribution rate is 14.6 percent of gross wages, shared equally by the employer and employees. A previous legally fixed additional contribution rate for employees (0.9%) and supplementary per capita premiums set by sickness funds have been abolished and replaced by a supplementary income-dependent contribution rate determined individually by each sickness fund. In 2015, the supplementary contribution rate was, on average, 0.83 percent—that is, most of the SHI-insured paid less than previously, with rates ranging between 0 and 1.3 percent. For 2016, the average supplementary contribution rate is estimated at 1.1 percent.

    This contribution also covers dependents (nonearning spouses and children). Earnings above EUR50,850 (USD64,994) per year (as of 2016) are exempt from contribution. The sickness funds’ contributions are centrally pooled and then reallocated to individual sickness funds using a risk-adjusted capitation formula, taking into account age, sex, and morbidity from 80 chronic and/or serious illnesses.

    Private health insurance: In 2015, 8.8 million people were covered through substitutive private health insurance. Private health insurance (PHI) is especially attractive for young people with a good income, as insurers may offer them contracts with more extensive ranges of services and lower premiums.

    There were 42 substitutive PHI companies in April 2016 (of which 24 were for-profit) covering the two groups exempt from statutory health insurance (SHI) (civil servants, whose health care costs are partly refunded by their employer, and the self-employed) and those who have chosen to opt out of SHI. All of the PHI-insured pay a risk-related premium, with separate premiums for dependents; risk is assessed only upon entry, and contracts are based on lifetime underwriting. Government regulates PHI to ensure that the insured do not face large premium increases as they age and are not overburdened by premiums if their income decreases.

    PHI also plays a mixed complementary and supplementary role, covering minor benefits not covered by SHI, access to better amenities, and some copayments (e.g., for dental care). The federal government determines provider fees under substitutive, complementary, and supplementary PHI through a specific fee schedule. There are no government subsidies for complementary and supplementary PHI. In 2014, all forms of PHI accounted for 8.9 percent of total health expenditure.

  • France

    Publicly financed health insurance: Total health expenditures constituted 12 percent of GDP (EUR257 billion, or USD310 billion) in 2014, of which 76.6 percent was publicly financed.

    SHI is financed by employer and employee payroll taxes (50%); a national earmarked income tax (35%); taxes levied on tobacco and alcohol, the pharmaceutical industry, and voluntary health insurance companies (13%); and state subsidies (2%).

    Coverage is universal and compulsory, provided to all residents by noncompetitive SHI. As of January 2016, SHI eligibility is universally granted under the PUMA (Protection universelle maladie, or universal health care coverage) law. Citizens can opt out of statutory health insurance (SHI) only in rare cases—for example, individuals 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.

    Private health insurance: Most voluntary health insurance (VHI) is complementary, covering mainly the copayments for usual care, balance billing, and vision and dental care (minimally covered by statutory health insurance [SHI]). Complementary insurance is provided mainly by not-for-profit, employment-based mutual associations or provident institutions, which are allowed to cover only copayments for care provided under SHI; 95 percent of the population is covered either through employers or via means-tested vouchers. Private for-profit companies offer both supplementary and complementary health insurance, but only for a limited list of services.

    VHI finances 13.5 percent of total health expenditure. The extent of VHI coverage varies widely, but all VHI contracts cover the difference between the SHI reimbursement rate and the service fee according to the official fee schedule. Coverage of balance billing is also commonly offered, and most contracts cover the balance for services billed at up to 300 percent of the official fee.

    In 2013, standards for employer-sponsored VHI were established by law to reduce inequities in coverage stemming from variations in access and quality. By 2017, all employees will benefit from employer-sponsored insurance (for which they pay 50% of the cost), which will cover at least 125 percent of SHI fees for dental care and EUR100 (USD121) for vision care per year. The population of beneficiaries without supplementary insurance is estimated at 4 million. Choice among insurance plans is determined by the industry in which the employer operates.

  • England

    Publicly financed health care: In 2014, the United Kingdom (U.K.) spent 9.9 percent of GDP on health care, of which public expenditure, mainly on the National Health Service (NHS), accounted for 79.5 percent. The majority of funding for the NHS comes from general taxation, and a smaller proportion from national insurance (a payroll tax). The NHS also receives income from copayments, people using NHS services as private patients, and some other minor sources.

    Coverage is universal. All those “ordinarily resident” in England are automatically entitled to NHS care, 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.

    Private health insurance: In 2015, an estimated 10.5 percent of the U.K. population had private voluntary health insurance, with 3.94 million policies held at the beginning of 2015. Private insurance offers more rapid and convenient access to care, especially for elective hospital procedures, but most policies exclude mental health, maternity services, emergency care, and general practice. Data on private insurers are not freely available, but according to the Competition and Markets Authority (2014), four insurers account for 87.5 percent of the market, with small providers making up the rest.

  • India

    Total health expenditures in India for 2013–2014 were 4.02 percent of GDP. Government expenditures amounted to 1.15 percent of GDP, which is lower than the average for low-income countries. Household out-of-pocket health spending was 69.1 percent of total health expenditures, making this a major component of the financing system.

    Publicly financed health insurance: In principle, government health services are available to all citizens under the tax-financed public system. In practice, bottlenecks in accessing such services compel households to seek private care, resulting in high out-of-pocket payments.

    One key initiative for making health care accessible and affordable is the Rashtriya Swasthya Bima Yojana (RSBY), begun in 2008 under the Ministry of Labour and Employment to provide health insurance coverage to families living on incomes below the poverty line. In 2015–2016, 41.3 million families were enrolled, achieving 57 percent of the target. The scheme now also includes 11 other categories of unorganized workers, with the aim of increasing coverage.

    Among other health coverage schemes, the Employees State Insurance Scheme for factory workers is India’s only true social health insurance scheme, to which both employers and employees contribute. The Central Government Health Scheme is for civil servants. These schemes comprise 4 percent of total government expenditures. In addition, railway and defense employees have their own schemes, and states have schemes for their employees as well. Overall, around 8 percent of all government spending is for health coverage.

    Despite these various schemes, evidence indicates that by 2014, less than 20 percent of the population was covered by any form of health coverage.

    Private health insurance: The majority of private expenditures are out-of-pocket payments made mainly at the point of service. Despite tax exemptions for insurance premiums, there has been limited uptake of voluntary private insurance among Indians.

  • Israel

    In 2015, national health expenditures accounted for 7.5 percent of GDP, a figure that has remained stable during the last two decades. In 2015, 62 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. (The Israeli figure is down from 63.5% in 2010 and 68% in 1995.)

    Publicly financed health insurance: Israel’s national health insurance (NHI) system automatically covers all citizens and permanent residents (aside from soldiers, who receive health care directly from the army). It is funded primarily through a special income-related health tax in combination with general government revenues, which in turn are funded primarily through progressive income-related sources such as income tax.

    Employers are required to enroll any foreign workers (whether documented or undocumented) in private insurance programs, whose range of benefits is similar to that of NHI. Private insurance is also available, on an optional basis, for tourists and business travelers. Nevertheless, there are people living in Israel who do not have health insurance, including undocumented migrants who are not working. Several services are made available to all individuals irrespective of their legal or insured status. These include emergency care, preventive mother and child health services, and treatment of tuberculosis, HIV/AIDS, and other sexually transmitted infections.

    Within the NHI framework, residents can choose among four competing nonprofit health plans. Government distributes the NHI budget among the plans primarily through a capitation formula that takes into account sex, age, and geographic distribution. The health plans are then responsible for ensuring that their members have access to the NHI benefit package, as determined by government.

    Private health insurance: Private voluntary health insurance (VHI) includes health plan VHI (HP-VHI), offered by each health plan to its members, and commercial VHI (C-VHI), offered by for-profit insurance companies to individuals or groups. In 2014, 87 percent of Israel’s adult population had HP-VHI, and 53 percent had C-VHI. HP-VHI premiums are age-related and cross-subsidized, and health plans cannot reject applicants. C-VHI premiums are risk-related, and coverage is tailored to consumers. C-VHI packages tend to be more comprehensive and more expensive than HP-VHI packages. While C-VHI coverage is found among all population groups, coverage rates are highly correlated with income.

    Together, these two types of private VHI financed 14 percent of national health expenditures in 2014. The Ministry of Health regulates HP-VHI programs, while the Commissioner of Insurance, who is part of the Ministry of Finance, regulates C-VHI programs. The focus of C-VHI regulation is actuarial solvency, with secondary attention to consumer protection; in HP-VHI regulation, there is more attention to equity considerations and potential impacts on the health care system.

    Israelis purchase VHI to secure coverage of services not included in the NHI package (e.g., dental care, certain lifesaving medications, institutional long-term care, and treatments abroad), care in private hospitals, or a premium level of service for services covered by NHI (e.g., choice of surgeon and reduction of waiting time). VHI is also supplementary to NHI, as it extends coverage of services in the health basket such as more physiotherapy or psychotherapy sessions. However, it does not cover user charges. VHI coverage is also purchased as a result of a general lack of confidence in the NHI system’s capacity to fully fund and deliver all services needed in cases of severe illness.

  • Italy

    Publicly financed health care: The National Health Service (NHS) covers all citizens and legal foreign residents. Coverage is automatic and universal. Since 1998, undocumented immigrants have access to urgent and essential services. Temporary visitors receive health services by paying for the costs of treatment.

    Public financing accounted for 75.8 percent of total health spending in 2014, with total expenditure standing at 9.1 percent of GDP. The public system is financed primarily through a corporate tax (approximately 35.6% of the overall funding in 2012) pooled nationally and allocated back to regions, typically in proportion to their contributions (there are large interregional gaps in the corporate tax base, leading to financing inequalities), and a fixed proportion of national value-added tax revenue (approximately 47.3% of the total in 2012) collected by the central government and redistributed to regions whose resources are insufficient to provide essential levels of care.

    The regions are allowed to generate their own additional revenue, leading to further interregional financing differences. Every year, the Standing Conference on Relations between the State, Regions, and Autonomous Provinces (with the presidents of the regions and representatives from central government as its members) sets the criteria (usually population size and age demographics) to allocate funding to regions. Local health units are funded mainly through capitated budgets.

    Since the National Health Service 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 are available.

    Privately financed health care: Private health insurance plays a limited role in the health system, accounting for roughly 1 percent of total spending in 2014. Around 6 million people are covered by some form of voluntary health insurance (VHI), which generally covers services excluded under the LEA, offering a higher standard of comfort and privacy in hospital facilities and 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. Tax benefits favor complementary over supplementary voluntary insurance.

    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 is characterized by three types of nonprofit organizations: voluntary mutual insurance organizations and corporate and collective funds organized by employers or professional associations for their employees or members. There is no information on the number of policies sold by each type of VHI provider, but nonprofit insurers cover the majority of the insured.

    In 2010, around 5.5 percent of the population had individual VHI coverage (1.33 million families), while around 2.5 million people had group coverage.

  • Japan

    Publicly financed health insurance: The Statutory Health Insurance System (SHIS), comprising more than 3,400 insurers, provides universal primary coverage. In 2013, estimated total health expenditure amounted to approximately 11 percent of GDP, 84.3 percent of which was publicly financed, mainly through the SHIS. Taxes, premiums, and user charges accounted for about 42 percent, 42 percent, and 13 percent of the current health expenditures, respectively.

    Citizens are mandated to enroll in one of the SHIS plans based on age, employment status, and/or place of residence as are resident non-citizens; undocumented immigrants and visitors are not covered. Insurance premiums vary between types of insurance funds and municipalities. Government employees are covered by their own insurers (known as Mutual Aid Societies) as are some groups of professionals (e.g., doctors in private practice). Those who fail to keep up their enrollment must pay up to two years’ worth of premiums when they reenter the system. Means-tested public assistance covers health care for its recipients. Citizens and resident non-citizens enrolled in the SHIS age 40 and over are mandatorily enrolled in long-term care insurance.

    Private health insurance: Although the majority of the population holds some form of private health insurance, it plays only a supplementary or complementary role. It developed historically as a supplement to life insurance and provides additional income in case of sickness, mainly in the form of lump-sum payments when insured persons are hospitalized or diagnosed with cancer or another specified chronic disease, or through payment of daily amounts during hospitalization over a defined period. Since the early 2000s, the number of standalone medical insurance policies has increased.

    Part of an individual’s life insurance premium and medical and long-term care insurance premiums can be deducted from taxable income. Small discounts can be applied to those employees whose employers have collective contracts with insurance companies. Both for-profit and nonprofit organizations operate private health insurance.

    The provision of privately funded health care has been limited to services such as orthodontics. Treatment of traffic accident injuries is not covered by the SHIS, but by compulsory and, usually, voluntary automobile insurance.

  • Netherlands

    Publicly financed health insurance: In 2015, the Netherlands spent 10.8 percent of GDP on health care, and 77 percent (2014 estimate) of curative health care services were publicly financed. All residents (and nonresidents who pay Dutch income tax) are mandated to purchase statutory health insurance from private insurers. At the end of 2014, 30,000 people (less than 0.2% of the population) were uninsured. People who conscientiously object to insurance, as well as active members of the armed forces (who are covered by the ministry of defense), are exempt. Insurers are required to accept all applicants, and enrollees have the right to change their insurer each year.

    Apart from acute care, long-term care, and obstetric care, undocumented immigrants have to pay for most health care themselves (they cannot take out health insurance). However, some mechanisms are in place to reimburse costs that undocumented immigrants are unable to pay. For asylum seekers, a separate set of policies has been developed. Permanent residents (for more than three months) are obliged to purchase private insurance coverage. Visitors are required to purchase insurance for the duration of their visit if they are not covered through their home country.

    Statutory health insurance is financed under the Health Insurance Act, through a nationally defined, income-related contribution, a government grant for the insured below age 18, and community-rated premiums set by each insurer (everyone with the same insurer pays the same premium, regardless of age or health status). Contributions are collected centrally and issued 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).

    Insurers are expected to engage in strategic purchasing, and contracted providers are expected to compete on both quality and cost. The insurance market is dominated by the four largest insurance conglomerates, which account for 90 percent of all enrollees. Currently, there is a ban on the distribution of profits to shareholders.

    Private (voluntary) health insurance: In addition to statutory coverage, most of the population (84%) purchases a mixture of complementary voluntary insurance covering benefits such as dental care, alternative medicine, physiotherapy, eyeglasses and lenses, contraceptives, and the full cost of copayments for medicines (excess costs above the limit for equivalent drugs—an incentive for using generics). Premiums for voluntary insurance are not regulated; insurers are allowed to screen applicants based on 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 of specialists or hospitals. In 2014, voluntary insurance accounted for 7.9 percent of total health spending.

  • Norway

    Publicly financed health care: Health expenditure represented 9.9 percent of GDP in 2015, slightly above the average of 8.9 percent for countries in the Organisation for Economic Co-operation and Development (OECD). Norway ranks among the highest in the OECD in terms of absolute expenditure per capita (NOK60 000, or USD6,122, in 2015). Public financing accounts for 85 percent of this spending.

    Coverage is universal and automatic for all residents. It is financed through national and municipal taxes. Social security contributions finance public retirement funds, sick leave payment, and, for some patient groups, reimbursement of extra health care costs.

    For acute hospitalization, there is no private alternative.

    Through common agreements, European Union residents have the same access to health services as in their home country. Other visitors are charged in full. Undocumented adult immigrants have access only to emergency acute care, while undocumented children receive the same care as citizens.

    Private health insurance: Private health insurance is provided by for-profit insurers and purchased for quicker access and greater choice of private providers. It covers less than 5 percent of elective services; it does not cover acute services. About 9 percent of the population, or nearly 15 percent of the workforce, has some kind of private insurance. About 91 percent of policies are paid for by an employer.

  • New Zealand

    Publicly financed health care: All permanent residents have access to a broad range of services, which are largely publicly financed through general taxes. Nonresidents, including tourists, are charged the full cost of services by public health care providers, unless treatment is related to an accident, in which case they are covered by a no-fault accident compensation scheme.

    Total health spending was 9.4 percent of GDP in 2015. Public spending, generated through general taxes, accounted for 79.8 percent of total spending.

    Privately financed health care: Private health insurance is offered by a variety of organizations, from nonprofits and “Friendly Societies” to for-profit companies, and accounts for about 5 percent of total health expenditure. 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, purchased predominantly by individuals.

  • Singapore

    Publicly financed health care: Singapore offers universal health care coverage to citizens, with a financing system anchored in the twin philosophies of individual responsibility and affordable health care for all. Coverage is funded through a combination of government subsidies (from general tax revenue), multilayered health care financing schemes, and private individual savings, all administered at the national level. National capital expenditures are set in the government’s annual budget.

    The first tier of protection comprises government subsidies of up to 80 percent of the total cost of care provided in public hospitals and primary care polyclinics. This is supported by a group of savings and insurance programs known as the “3Ms” system—for Medisave, MediShield, and Medifund—which plays a critical role in maintaining the public’s health and welfare.

    Medisave is a mandatory medical savings program that requires workers to contribute a percentage of their wages to a personal account, with a matching contribution from employers. Individual contributions to and withdrawals from the accounts are tax-exempt. Funds in the account are used, under strict guidelines, to pay for health services such as hospitalization, day surgery and certain outpatient expenses, and health insurance for the account holder, as well as for family members.

    MediShield is a low-cost catastrophic health insurance scheme to help policyholders meet the medical expenses from major or prolonged illnesses that their Medisave balance would not be sufficient to cover. MediShield operates on a copayment and deductible system. The premiums for MediShield are payable by the insured through Medisave. Singaporeans are automatically enrolled in the program. Permanent residents are covered by MediShield, but undocumented immigrants and visitors are not covered.

    Medifund is the government endowment fund set up to aid the indigent. The fund covers citizens who have received treatment from a Medifund-approved institution and have difficulties affording their medical expenses despite government subsidies, Medisave, and MediShield coverage.

    Private health insurance: A range of private insurance plans are available from for-profit insurers to supplement MediShield coverage. Called Integrated Shield Plans, they are funded from individuals’ Medisave accounts. Singaporeans also have the option of purchasing other types of private insurance, although premiums for these cannot be paid for with Medisave funds. Employers also may provide insurance to employees as a benefit.

  • Sweden

    Publicly financed health care: Health expenditures represented 11 percent of GDP in 2014. About 83 percent of this spending was publicly financed, with county councils’ expenditures amounting to almost 57 percent, municipalities’ to 25 percent, and the central government’s to almost 2 percent. The county councils and the municipalities levy proportional income taxes on their populations to help cover health care services. In 2015, 69 percent of the county councils’ total revenues came from local taxes and 17 percent from subsidies and national government grants financed by national income taxes and indirect taxes. General government grants are designed to redistribute resources among municipalities and county councils based on need. Targeted government grants finance specific initiatives, such as reducing waiting times. In 2015, 89 percent of county councils’ total spending was on health care.

    Coverage is universal and automatic. The 1982 Health and Medical Services Act states that the health system must cover all legal residents. Emergency coverage is provided to all patients from European Union/European Economic Area countries and to patients from 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 (e.g., maternity care).

    Private health insurance: Private health insurance, in the form of supplementary coverage, accounts for less than 1 percent of expenditures. Associated mainly with occupational health services, it is purchased primarily to ensure quick access to an ambulatory care specialist and to avoid waiting lists for elective treatment. Insurers are for-profit. In 2016, 635,000 individuals had private insurance, representing roughly 10 percent of all employed individuals aged 15 to 74 years.

  • Taiwan

    Publicly financed health insurance: Enrollment in the National Health Insurance program (NHI) is mandatory for all citizens and for foreigners residing in Taiwan for longer than six months. As of 2016, 99.9 percent of the population is enrolled.

    The NHI is predominantly a premium-based social health insurance system. Sixty-eight percent of revenue is derived from payroll-based premiums; 27 percent from supplementary premiums levied on nonpayroll income (large bonuses, professional fees, wages from second and third jobs, and incomes from dividends, interests, rents); and 5 percent from tobacco tax and lottery gains. Government accounts for 23.3 percent of payroll-based premiums; households account for 38.2 percent; and employers account for 38.6 percent. In 2016, rates for payroll-based and supplementary premiums are 4.69 percent and 1.91 percent, respectively.

    During most of the period 1998 to 2010, NHI expenditures nearly always exceeded revenues. However, by raising the premium rate from 4.55 percent to 5.17 percent of payroll income in 2010—the second increase in its then 15-year history—the National Health Insurance Administration (NHIA) began to accumulate surpluses starting in 2012.

    Premium contributions are calculated on a per capita basis but are limited to a maximum of four members per household (the insured plus three dependents). Any additional members are covered for free. Premiums are paid monthly, with nearly all Taiwanese paying their premiums on time.

    Private health insurance: Private health insurance consists of disease-specific cash indemnity policies. Patients can use the cash for private hospital rooms or products, such as drug-eluting stents, not covered by the NHI. Private policies do not cover medical services covered by the NHI, nor do they buy faster access to specialists, diagnostic tests, or choice of specialists. As a component of total health expenditures, however, private coverage is growing, although the exact extent is unknown.

  • United States

    In 2015, about 67.2 percent of U.S. residents received health coverage through private voluntary health insurance (VHI): 55.7 percent received employer-provided insurance, and 14.6 percent acquired coverage directly. Public programs covered roughly 37.1 percent of residents: Medicare covered 16.3 percent, Medicaid 19.6 percent, direct-purchase 16.3 percent, and military coverage 4.7 percent.

    In the first quarter of 2016, 27.3 million individuals were uninsured, representing 8.6 percent of the population, down from 9.1 percent in 2015. The implementation of the Affordable Care Act’s (ACA) major coverage expansions in January 2014 has increased the share of the population with insurance. These reforms include: the requirement that most Americans procure health insurance; the opening of the health insurance marketplaces, or exchanges, which offer premium subsidies to lower- and middle-income individuals; and the expansion of Medicaid in many states, which increased coverage for low-income adults. Between 2014 and the start of 2016, the overall rate of health insurance coverage increased for most racial and ethnic groups. Hispanics had the largest increase (6.6 percentage points), followed by Asian Americans (4.8 points), non-Hispanic blacks (3.1 points), and non-Hispanic whites (2.4 points). It is projected that the ACA will reduce the number of uninsured by 24 million by 2018. However, with the likely repeal of the health law by the new Congress and administration, it is unknown how progress in reducing the uninsured population will be affected.

    Public programs provide coverage to various, often overlapping, populations. In 2015, more than 10 million Americans were both entitled to Medicare and eligible for Medicaid services (the so-called dual eligibles). The Children’s Health Insurance Program (CHIP), which in some states is an extension of Medicaid and in others a separate program, covered more than 8.1 million children in low-income families in 2015.

    Undocumented immigrants are generally ineligible for public coverage, and nearly two-thirds are uninsured. Hospitals that accept Medicare funds (which are the vast majority) must provide care to stabilize any patient with an emergency medical condition, and several states allow undocumented immigrants to qualify for emergency Medicaid coverage beyond “stabilization” care. Some state and local governments provide additional coverage, such as coverage for undocumented children or pregnant women.