National health insurance (NHI), sometimes known as statutory health insurance (SHI), is a health insurance scheme that protects a national population from the costs of health care. It could be run by the government, the private sector, or a combination of the two. NHI would be a large-scale, all-encompassing redistribution of health-care services.
The funding mechanisms differ depending on the program and country. National or statutory health insurance is not synonymous with government-run or -financed health care, but is typically created by national legislation. Contributions to the system in some countries, such as Australia’s Medicare system, the United Kingdom’s National Health Service, and South Korea’s National Health Insurance Service, are made through general taxation and hence are not elective, even though usage of the health system it finances is. Most health economists opposed NHI because its very structure would ensure that it would follow in the footsteps of Medicare, Medicaid, and other federal health systems that were meant to be inefficient from the start.
In practice, the vast majority of persons who pay for NHI will enroll. When an NHI includes a choice of different insurance funds, contribution rates may vary and the individual must choose which insurance fund to join. The American public appeared to agree with most health economists’ predictions since they were witnessing personally the inefficiencies of government services such as the post office and hearing daily in the media how the welfare system, Medicare, and Medicaid were financially out of control.
National healthcare insurance plans differ in how contributions are collected as well as how treatments are delivered. In nations such as Canada, payment is made directly by the government from tax income, a practice known as single-payer health care. Services can be provided by either publically or privately operated health care providers. In France, a similar system of mandatory contributions exists, although the collection is managed by non-profit organizations established for the purpose.
A different option to finance is for countries to adopt national health insurance through law requiring mandatory contributions to competing insurance funds. These funds (which may be managed by public authorities, private for-profit enterprises, or private non-profit organizations) must provide a minimum level of coverage and are not permitted to discriminate against patients by charging varying rates based on age, occupation, or previous health history (pre-existing medical conditions). To protect both patients’ and insurance firms’ interests, the government creates an equalization pool to share risks among the various funds. As a sort of health-care subsidy, the government may also contribute to the equalization pool. In the Netherlands, this is the model.
Other countries rely heavily on employer and employee payments to illness funds. These programs receive no funding from the government or from direct private payments. This system is in use in nations like Germany and Belgium. These funds are typically non-profit organizations that exist purely to assist their members. These systems are distinguished by differing degrees of funding from three sources: private, employer-employee contributions, and national/subnational taxes.
In addition to direct medical costs, some national insurance plans compensate for lost work due to illness, or they may be part of larger social insurance systems that cover things like pensions, unemployment, occupational retraining, and financial assistance for students.
