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Who is covered and how is insurance financed?

  • Australia

    Publicly financed health insurance: Total health expenditure in 2013–2014 represented 9.8 percent of gross domestic product (GDP), an increase of 3.1 percent from 2012–2013. Two thirds of this expenditure (67.8%) 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. Government funding is raised through general federal taxes and through the Medicare Levy, 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. There is a 2 percent increase in the base premium for every year after age 30 for people who do not sign up. Consequently, take-up is highest for this age group but rapidly drops off as age increases, with a trend to opt out at age 50 and up.

    Nearly half of the Australian population (47%) had private hospital coverage and nearly 56 per cent general treatment coverage in 2015.

    Insurers are a mix of for-profit and nonprofit providers. In 2013–2014, private health insurance expenditures represented 8.3 percent of all health spending.

    Private health insurance can include coverage for hospital, 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 number of services.

    Private health insurance coverage varies by socioeconomic status. PHI covers just one-third of the most disadvantaged 20 percent of the population, a proportion that rises to more than 79 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 public health expenditures were forecast to account for an estimated 10.9 percent and 8.0 percent of GDP, respectively, in 2015; by that measure, 70.7 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 according to their own residency requirements. Temporary legal visitors, undocumented immigrants (including denied refugee claimants), 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 2015. The federal government contributes cash funding to the provinces and territories on a per capita basis through the Canada Health Transfer, which totaled CAD34 billion (USD27 billion) in 2015–2016, accounting for an estimated 24 percent of total provincial and territorial health expenditures.

    (Please note that, throughout this profile, all figures in USD were converted from CAD at a rate of about CAD1.26 per USD, the purchasing power parity conversion rate for GDP in 2014 reported by OECD (2015) for Canada.)

    Privately financed health care: 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 2013, approximately 90 percent of premiums for private health plans were paid through group contracts with employers, unions, or other organizations. In 2015, private health insurance accounted for approximately 12 percent of total health spending. The majority of insurers are for-profit.

  • China

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

    Publicly financed health insurance: In 2013, China spent approximately 5.6 percent of its gross domestic product (CNY3,187B, or USD871B) on health care, with 30 percent financed by local governments and 36 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 insurance (launched in 1998); 2) urban resident basic insurance (launched in 2009); and 3) the new cooperative medical scheme for rural residents (launched in 2003).

    Urban employment-based basic insurance is mainly financed from employee and employer payroll taxes, with minimal government funding. Participation is mandatory for employees in urban areas; the insured population was 274.2 million in 2013. Employees’ non-employed family members are not covered. Urban resident basic insurance, which is voluntary at the household level, covered 299 million self-employed individuals, children, students, and elderly adults in 2013. Both urban employment-based and urban resident insurance are administrated by the Ministry of Human Resources and Social Security and run by local authorities. The new cooperative medical scheme, mainly administrated 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 802 million in 2013, representing a coverage rate of 98.7 percent.

    Urban resident basic insurance and the new cooperative medical scheme are mainly government financed. In regions where the economy is less developed, the central government provides the largest share of subsides, with provincial and prefectural governments providing the rest. In more-developed provinces, most government subsidies are locally provided (mainly provincial). Coverage of 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 coverage is provided mainly by for-profit companies. In 2014, total premiums collected amounted to CNY158.7B (USD43.4B), an increase of 45 percent compared to the prior year, and represents approximately 10 percent of total (public and private) health insurance spending.

    Purchased primarily by higher-income individuals and by employers for their workers, private insurance often enables people to receive better quality of care and higher reimbursement, as some health services are very expensive or 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 2013 accounted for 84 percent of total health spending, representing 10.4 percent of GDP in 2013 (OECD, 2015a). 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 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.

  • England

    Publicly financed health care: In 2013, the U.K. spent 8.8 percent of GDP on health care, of which public expenditure, mainly on the National Health Service (NHS), accounted for 83.3 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 illegal immigrants, only treatment in an emergency department and for certain infectious diseases is free (Department of Health, 2013a).

    Private health insurance: In 2012, 10.9 percent of the UK population had private voluntary health insurance. The bulk of it was provided through employers (3.97 million policies) versus individual policies (0.97 million). 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.

  • France

    Publicly financed health insurance: Total health expenditures constituted 11 percent of GDP in 2013, of which 76 percent was publicly financed.

    Statutory health insurance (SHI) is financed by employer and employee payroll taxes (64%); a national earmarked income tax (16%); taxes levied on tobacco and alcohol, the pharmaceutical industry, and voluntary health insurance companies (12%); state subsidies (2%); and transfers from other branches of Social Security (6%).

    Coverage is universal and compulsory, provided to all residents by noncompetitive SHI. SHI eligibility is either gained through employment or granted, as a benefit, to students, to retired persons, and to unemployed adults who were formerly employed (and their families). Citizens can opt out of SHI only in rare cases (e.g., individuals working for foreign companies). The state covers the insurance costs of residents who are not eligible for SHI, such as the long-term unemployed, and 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 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 13.8 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.

    To reduce inequities in coverage stemming from variations in access and quality, standards for employer-sponsored VHI were established by law in 2013. By 2016, all employees will benefit from employer-sponsored insurance (for which they pay 50% of the cost), which would cover at least 125 percent of SHI fees for dental care and EUR100 (USD121) for vision care per year. (All figures in USD were converted from EUR at a rate of about 0.83 EUR per USD, the purchasing power parity conversion rate for GDP in 2014 reported by OECD, 2015 for France.) 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 (DREES, 2015).

  • Germany

    Publicly financed health insurance: In 2013, total health expenditure was 11.5 percent of GDP, of which 73 percent was public and 58 percent was statutory health insurance (SHI) spending. General tax–financed federal spending on “insurance-extraneous” benefits provided by SHI (e.g., coverage for children) amounted to about 4.4 percent of total expenditure in 2014 and 2015. Sickness funds are funded 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 EUR54,900 (USD69,760) per year as of 2015 are mandatorily covered by SHI, and their nonearning dependents are covered free of charge.

    (Please note that, throughout this profile, all figures in USD were converted from EUR at a rate of about EUR0.79 per USD, the purchasing power parity conversion rate for GDP in 2014 reported by OECD (2015) for Germany.)

    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 (and 75% do) or purchase substitutive private health insurance (PHI), which also covers civil servants. About 86 percent of the population receive their primary coverage through SHI and 11 percent through substitutive PHI. The remainder (e.g., soldiers and policemen) are covered under special programs. Visitors are not covered through German SHI. Undocumented immigrants are covered by social security in case of acute illness and pain, as well as pregnancy and childbirth.

    As of 2015, the legally set uniform contribution rate is 14.6 percent of gross wages. Both the legal contribution rate for employees (0.9%) and the supplementary premiums set by sickness funds have been abolished and replaced by a supplementary income-dependent contribution rate determined by each sickness fund individually. As of 2015, the supplementary contribution rate is, on average, 0.9 percent—that is, most of the SHI-insured pay the same as previously, but rates range between 0 percent and 1.3 percent.

    This contribution also covers dependents (nonearning spouses and children). Earnings above EUR49,500 (USD63,360) per year (as of 2015) are exempt from contribution. 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 2014, 8.8 million people were covered through substitutive private health insurance (PHI. 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 June 2015 (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). Federal government determines provider fees in substitutive, complementary, and supplementary PHI through a specific fee schedule. There are no government subsidies for complementary and supplementary PHI. In 2013, all forms of PHI accounted for 9.2 percent of total health expenditure.

  • India

    Publicly financed health insurance: In spite of strong economic growth, total expenditures on health represent 4.1 percent of GDP. Of total health expenditures, 71.6 percent were financed by private funds and 26.7 percent by public funds, including central, state, and local government bodies and external flows. Per capita health spending has risen from USD21 in 2000 to USD44 in 2009. The 12th five-year plan (2012–17) aims to increase public spending to 2 per cent of GDP.

    In principle, coverage of health services is universal and available to all citizens under the tax-financed public system. In the draft national policy document, it is proposed that tax-based financing remain the major source of funding for the 70 percent of the population who are poor. Free primary care provided by the public sector, supplemented by strategic purchase of secondary and tertiary care services from both the public and private sectors, would be the main financing approach.

    However, in practice, severe bottlenecks in accessing government health care services compel households to seek private care, often resulting in high out-of-pocket payments.

    In addition to public health facilities, a number of health insurance schemes currently exist in India. The central government’s health services for civil servants and state-level employee insurance for formal workers are mandatory schemes. More recently, a number of social health initiatives, like Rashtriya Swasthya Bima Yojana (RSBY), have been launched to broaden health care access, mainly for the poor. These have enrolled 36 million people, expanding coverage from 5 percent to 15 percent over a six-year period. With proposed expansion of the RSBY scheme to include rickshaw and taxi drivers, rag pickers, sanitation workers, domestic workers, street vendors, building and construction workers, and beedi (tobacco) workers, coverage under the scheme is expected to increase further. Given these trends, a World Bank study projects that by 2015, about half the country’s population could be covered with some form of health insurance.

    Private health insurance: The majority of private expenditures are out-of-pocket payments made mainly at the point of service, and less than 5 percent are financed by voluntary health insurance (VHI). Despite tax exemptions for insurance premiums, only upper-class urban populations are able to afford VHI, which serves as a substitute for government health services. Given India’s expanding middle class, low VHI penetration is surprising. It appears that in the coming years, the private insurance industry, which is still in its infancy, has the potential to expand.

  • Israel

    In 2013, national health expenditures accounted for 7.6 percent of GDP, of which about 60 percent are publicly financed.

    Publicly financed health insurance: Israel’s national health insurance (NHI) system automatically covers all citizens and permanent residents. It is funded primarily through a combination of a special income-related health tax and 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 benefits 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 (Brammli-Greenberg and Medina-Artom, 2015). C-VHI packages tend to be more comprehensive and more expensive than the 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 2012, a figure that has been increasing steadily. 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 more generally; in HP-VHI regulation, there is more attention to equity considerations and potential impacts on the health care system.

    Reasons for purchasing VHI include securing coverage of services not covered by NHI (e.g. dental care, certain life-saving 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 times). 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 illnesses.

  • Italy

    Publicly financed health care: The National Health Service 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 can receive health services by paying for the costs of treatment.

    Public financing accounted for 78 percent of total health spending in 2013, 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 the source region (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 unable to raise sufficient resources to provide the essential levels of care.

    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.

    The 2008 financial law established that regions would be financed through standard rates set on the basis of actual costs in the regions considered to be the most efficient. Established in legislation, this policy is not yet operating.

    Since the National Health Service does not allow members to opt out of the system and seek only private care, substitutive insurance does not exist. At the same time, complementary and supplementary private health insurance is 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 2009. Approximately 15 percent of the population has some form of private insurance, which generally covers services excluded under the LEA, to offer 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, where companies cover employees and sometimes their families; and noncorporate, with individuals buying insurance for themselves or for their family. Policies, either collective or individual, are supplied by for-profit and nonprofit organizations. The market is characterized by the presence of three types of nonprofit organizations: voluntary mutual insurance organizations, and corporate and collective funds organized by employers/professional categories for their employees/members.

    Approximately 74 percent of policies are purchased by individuals, while the remaining 26 percent are purchased by groups.

  • Japan

    Publicly financed health insurance: The public health insurance system (PHIS), comprising more than 3,400 insurers, provides universal primary coverage (National Institute of Population and Social Security Research, 2014). In 2013, estimated total health expenditure amounted to approximately 10 percent of GDP, 83 percent of which was publicly financed, mainly through the PHIS. Within the PHIS, premiums, tax-financed subsidies, and user charges accounted for about 49 percent, 38 percent, and 12 percent of the sum of health expenditures, respectively.

    Citizens are mandated to enroll in one of the PHIS plans based on employment status and/or place of residence, as are resident noncitizens; undocumented immigrants and visitors are not covered. Insurance premiums and the basis upon which they are charged 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 noncitizens enrolled in the PHIS age 40 and over are mandatorily enrolled in long-term care insurance.

    Private health insurance: Private insurance plays only a minor 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 (up to JPY40,000, or USD380) 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 dental orthodontics, expensive artificial teeth, and treatment of traffic accident injuries (although treatment of these injuries is usually paid for by compulsory or voluntary automobile insurance.)

  • The Netherlands

    Publicly financed health insurance: In 2013, the Netherlands spent 12 percent of GDP on health care, and 78 percent 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. 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 3 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 insurer 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, spectacles 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 and offer both statutory and voluntary benefits. 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 specialist or hospital. In 2013, voluntary insurance accounted for 7.6 percent of total health spending.

  • 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, such as tourists and illegal immigrants, 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 9.5 percent of GDP in 2013. 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 often affords faster access to nonurgent treatment. About one-third of the population has some form of private insurance, purchased predominantly by individuals.

  • Norway

    Publicly financed health care: Total health expenditure represented 9.2 percent of GDP in 2014, which is about the average for countries in the Organisation for Economic Co-operation and Development (OECD). But Norway ranks among the highest in the OECD in terms of absolute expenditure per capita in 2014).

    (Please note that, throughout this profile, all figures in NOK were converted to USD at a rate of about NOK9.45 per USD, the 2014 purchasing power parity for GDP published for Norway by OECD, 2015.)

    The nationally managed and financed health system, providing more than 95 percent of all health care, is built on universal coverage and on the principle of equal access for all regardless of socioeconomic status, ethnicity, and area of residence. It is financed through national and municipal taxes. Social security contributions finance public retirement funds, sick leave payment, and reimbursement of extra health care costs for some patient groups.

    For acute hospitalization, there is no private alternative.

    Through common agreements, European Union residents and other legal residents have the same access to health services as Norwegians. 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 to examinations and care but also for choice among private providers. Private health insurance accounts for less than 5 percent of planned services. About 8 percent of the population (or nearly 15 % of the workforce) have some kind of private insurance. About 92 percent of policies are paid for by an employer.

  • Singapore

    Publicly financed health care: The Singapore health care system is funded directly by the national government through its Ministry of Health. The ministry’s budget for fiscal year 2013 was SGD5.9 billion (USD6.7 billion), or 1.6 percent of GDP. The funds come from general revenue, and they are used for subsidies, campaigns to promote good health practices, manpower development and training, and infrastructure expenses. Most of the budget is devoted to subsidies for patients receiving medical care at public hospitals, polyclinics, community hospitals, and certain institutions providing intermediate and long-term care. Other budget allocations are for initiatives addressing obesity prevention, tobacco control, childhood preventive health services, chronic disease management, and public education.

    Singapore offers its citizens universal health care coverage, funded through a combination of government subsidies, multilayered financing schemes, and private individual savings, all administered at the national level. The first tier of protection is provided by government subsidies of up to 80 percent of the total bill in public hospitals and primary care polyclinics. There are also subsidies of up to 80 percent in the government-funded intermediate and long-term care institutions. This is supported by a system of savings and insurance programs to help individuals and families pay for their care—known as the “3Ms,” for the Medisave, MediShield, and Medifund programs. Together, these play a critical role in maintaining Singaporeans’ 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. Account funds are used, under strict guidelines, to pay for health services such as hospitalization, day surgery, and certain outpatient expenses, as well as health insurance for the account holder and family members.

    MediShield is a low-cost catastrophic health insurance scheme to help policyholders meet medical expenses for major or prolonged illnesses that their Medisave balance would not be sufficient to cover. All permanent residents are automatically enrolled in the program; undocumented immigrants and visitors are not covered.

    MediShield operates on a copayment and deductible system, with premiums payable by the insured through Medisave. A universal health insurance scheme will replace MediShield at the end of 2015.

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

    Privately financed health care: According to the World Health Organization (2013), in 2010, private expenditure amounted to 69 percent of the nation’s total expenditure on care, 10.1 percent coming from private prepaid plans.

    Private insurance is available from a number of for-profit companies, usually in the form of Medisave-approved Integrated Shield Plans. These plans serve as a supplement to MediShield, providing, for example, additional benefits and coverage when a patient opts for Class A and Class B1 wards in public hospitals or private hospitalization. Individuals can use funds from their Medisave accounts to pay the premiums for Integrated Shield Plans.

    Employers may also offer private insurance to their employees as a staff benefit. Typically, employer-sponsored insurance cover primary care and other outpatient visits, in addition to hospitalization.

  • Sweden

    Publicly financed health care: Health expenditures represented 11 percent of GDP in 2013. About 84 percent of this spending was publicly financed, with county councils’ expenditures amounting to 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 2013, 68 percent of county councils’ total revenues came from local taxes and 18 percent from subsidies and national government grants financed by national income taxes and indirect taxes (SALAR, 2014). General government grants are designed to reallocate some resources among municipalities and county councils. Targeted government grants finance specific initiatives, such as reducing waiting times. In 2013, about 90 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 have the right to receive care that cannot be deferred (e.g., maternity care). Undocumented adults have the right to receive nonsubsidized immediate 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 2015, 614,000 individuals had private insurance, accounting for roughly 10 percent of all employed individuals aged 15 to 74 years.

  • 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 statutory health insurance (SHI) premiums.
    3. Social insurance contributions from health-related coverage of accident insurance, old-age insurance, disability insurance, and military insurance.

    All government expenditures are financed by general taxation. In 2013, direct spending by government accounted for 20.2 percent of total health expenditures (CHF69.2 billion, or USD50.5 billion), while income-based SHI subsidies accounted for an additional 5.8 percent.

    (Please note that, throughout this profile, all figures in USD were converted from CHF at a rate of about CHF1.37 per USD, the purchasing power parity conversion rate for GDP in 2014 reported by OECD, 2015 for Switzerland.)

    Including SHI premiums (30.9% of total health expenditure, excluding statutory subsidies), other social insurance schemes (6.5%), and old age and disability benefits (4.4%), publicly financed health care accounted for 67.9 percent of all spending.

    Mandatory SHI coverage is universal. Residents are legally required to purchase SHI within three months of arrival in Switzerland, which then applies retroactively to the arrival date. 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. Missing SHI for undocumented immigrants remains an unsolved problem acknowledged by the Swiss Federal Council (SFC), the highest governing and executive authority.

    SHI is offered by competing nonprofit insurers supervised by the Federal Office of Public Health (FOPH), which sets floors for premiums offered to cover past, current, and estimated future costs for insured individuals in a given region. Cantonal average annual premiums in 2015 for adults range from CHF3,836 (USD2,800) to CHF6,398 (USD4,670). 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 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 2013, 60.6 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 32.1 percent of total health expenditure in 2013, which is high by comparison with other OECD countries. There is complementary voluntary health insurance (VHI, 7.3% of total expenditure) for services not covered in the basic basket of SHI, 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.

    VHI is regulated by the Swiss Financial Market Supervisory Authority. 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 SHI 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.

  • United States

    In 2014, about 66 percent of U.S. residents received health insurance coverage from private voluntary health insurance (VHI): 55.4 percent received employer-provided insurance, and 14.6 percent acquired coverage directly. (Estimates by type of coverage are not mutually exclusive; people can be covered by more than one type of health insurance during the year.) Public programs covered roughly 36.5 percent of residents: Medicare covered 16 percent, Medicaid 19.5 percent, and military health care insurance 4.5 percent. (The estimates by type of coverage are not mutually exclusive; people can be covered by more than one type of health insurance during the year.).

    In 2014, 33 million individuals were uninsured, representing 10.4 percent of the population. The implementation of the Affordable Care Act’s major coverage expansions in January 2014, however, 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. According to one survey, the rate of uninsurance among working-age adults fell by 7 percentage points between March 2015 and September 2013; another survey found that 17.6 million previously uninsured people have acquired health insurance coverage. It is projected that the ACA will reduce the number of uninsured by 24 million by 2018.

    Public programs provide coverage to various, often overlapping populations. In 2011, nearly 10 million Americans were eligible for both Medicare and Medicaid (the “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 2014 (, 2014).

    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.