The following is an editorial by Alicja Grzadkowska, senior news editor at Insurance Business. To reach out to Alicja, email her at [email protected]
The world is closely watching the US election, which will decide the direction of the country’s social and economic policies for the coming four years. The fate of health insurance in the US is one of the major decisions on the table and has come up repeatedly during the recent presidential and vice-presidential debates.
During the VP debate, Mike Pence claimed that Obamacare “was a disaster,” a sentiment in line with the Trump administration’s refusal to defend the healthcare law before the Supreme Court. The US Supreme Court is set to hear its blockbuster clash over the constitutionality of the Affordable Care Act on November 10, a week after an election during which Democrats have made healthcare a key focus. President Donald Trump has said he will protect people with pre-existing conditions, but after close to four years in power, he has yet to propose a replacement, should the court move against Obamacare. On the other side of the ring, Democrats have argued that overturning the law would be particularly devastating during the COVID-19 pandemic, considering that millions of people are out of work and at risk of losing their employer health insurance.
The debate over the future of health insurance in the US ties back to a provision known as the individual mandate, which originally required people to get health insurance or pay a tax penalty. A Republican-controlled Congress backed Trump to get rid of the tax penalty, leaving the mandate with no teeth. Republican-controlled states in turn sued to challenge the law, saying the tax change required the entire measure to be invalidated, and the Trump administration is largely backing that position at the Supreme Court.
The fight over health insurance in the US brings up discussions around how other developed countries have approached this important social concern. By and large, peers of the US have implemented public health insurance systems, though there are some differences between their approaches.
The United States’ neighbor to the north offers universal coverage for medically necessary healthcare services provided to Canadians on the basis of need, instead of their ability to pay. Private health insurance was, however, once the norm in the country, but the tide started to turn after the Second World War, when the government of Saskatchewan introduced a province-wide, universal hospital care plan in 1947. British Columbia and Alberta followed suit a few years later and, by 1984, federal legislation called the Canada Health Act was passed, replacing federal hospital and medical insurance acts that preceded it by consolidating their principles.
Today, alongside public healthcare, Canadians can also purchase or receive cover via their employers private health coverage that reimburses them for additional medical expenses. Criticisms of this healthcare system include longer wait times for treatments and lack of public coverage for what some understand to be basic needs, such as certain forms of birth control.
Similar to Canada, the United Kingdom uses a state-funded healthcare system called the National Health Service (NHS), which guarantees care for all. According to the Commonwealth Fund, all English residents are automatically entitled to free public health care through the NHS, which means they receive coverage for hospital, physician, and mental healthcare services.
The budget of the NHS is funded mainly through general taxation, and UK residents also have the ability to get additional coverage, with around 10.5% of the population paying for voluntary supplemental insurance to get more rapid access to elective care.
Australians continue the streak of governments that fund healthcare for their residents, though again, there is a mix of public and private solutions. Medicare and the public hospital system provide free or low-cost access for all Australians for many healthcare services, while private health insurance provides Australians with choice beyond the public system. Another key part of Medicare in the country is the Pharmaceutical Benefits Scheme (PBS), which makes some prescription medicines cheaper. This system has been Australia’s governing healthcare scheme since 1984.
New Zealand’s publicly funded health insurance scheme dates back to the 1938 Social Security Act. Shortly after the passing of the act, the government accomplished the goal of universal healthcare.
Thanks to this law, New Zealand has achieved universal health coverage through a mostly publicly funded, regionally administered delivery system, according to the Commonwealth Fund. Services that are covered under this system range from inpatient to outpatient services, as well as mental health, long-term care, and prescription drugs. Most services are financed by general taxes, though patients make co-payments on some services and products, though there are no deductibles. Around 33% of the population in New Zealand also has private insurance to help pay for non-covered services and co-payments.
The continent is, as expected, home to a hodge-podge of healthcare systems since the area encompasses so many countries, though public coverage seems to be a common theme. Singapore, for instance, boasts a high level of care for permanent residents through its Medicare system, while Thailand’s healthcare is delivered via private international and public government-funded hospitals. Meanwhile, the healthcare system in the Philippines involves state-subsidized public healthcare, as well as private healthcare that provides more consistent care and facilities.
The US clearly has some work to do in sorting out its healthcare system, considering some of the statistics around the health of its residents and their ability to access these services. A recent analysis from the Commonwealth Fund, which called on health data from the Organization for Economic Co-operation and Development (OECD), reported that the US spends more on healthcare as a share of the economy, which is almost twice as much as the average OECD country, but has the lowest life expectancy and highest suicide rates among the 11 OECD nations.
Moreover, the typical American pays $1,122 out-of-pocket for healthcare, including expenses like co-payments and health insurance deductibles. According to the Commonwealth Fund’s analysis, only the Swiss pay more, while residents of both France and New Zealand pay less than half of this figure.
As the election approaches and the COVID-19 pandemic continues to debilitate populations and industries around the world, the direction of health insurance in the US will perhaps have more significant implications for its population than at any other point in recent history. It would do well to look to its peers to determine what’s worked for residents when it comes to healthcare, and what’s left people without access to crucial services.