Private Health Insurance Is Global

https://www.vox.com/health-care/2019/2/12/18215430/single-payer-private-health-insurance-harris-sanders

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Private health insurance is mandatory in Canada and Europe (including Scandinavia) and Israel and Australia etc

An international perspective is helpful here. When you look out at the rest of the world — at the dozens of countries that run universal health care systems — you find that every universal health plan relies, in some form or another, on private insurance.

“Basically, every single country with universal coverage also has private insurance,” says Gerard Anderson, a professor at Johns Hopkins University who studies international health systems. “I don’t think there is a model in the world that allows you to go without it.”

Other developed countries routinely use private insurance to fill in the gaps of their public plans or to offer patients a way to get to see a doctor a bit faster. Some countries, like Australia, even take aggressive steps like offering tax benefits to encourage citizens to enroll in private coverage alongside their public plan.

“Each country has figured out its own role for private insurance,” says Robin Osborn, a vice president at the nonprofit Commonwealth Fund who studies international health systems. “In almost every system, it tends to not be controversial because the commitment to basic universal coverage is there.”

How other countries use private health insurance, it turns out, can actually tell you a lot about what countries value in a health care system — and how they think access to care ought to be organized.
The three ways other countries use private health insurance

When you look out at our peer countries, you essentially see them using private health coverage in three distinctive ways.

First, there are some countries that require all citizens to enroll in health coverage run by private insurers. These insurers typically compete in a market with strict rules about what they must cover and how much different medical services cost.

The Netherlands and Israel are good examples of this type of system. In both countries, citizens are required to purchase coverage from a private plan. Somewhat coincidentally, the Netherlands and Israel both have four dominant health plans in their private markets.

In each case, the insurers are required to cover the same set of benefits and cannot charge higher premiums for the sick. But they can compete along other dimensions.

“They compete on what other benefits do they offer, and the price of the premium too,” Osborn says. “Generally, though, people don’t switch insurance very much. They tend to stick with their plans for a long time, even though they have the option to switch each year.”

The benefit these systems offer is primarily about choice: In Israel and the Netherlands, patients have multiple options for where they want to seek health coverage.

Second, there are some countries where private insurance supplements public insurance. It’s quite common for Canadians and Europeans to purchase supplemental insurance that covers things that the public plan won’t.

Sometimes this takes the form of supplemental insurance to pay for non-covered benefits. In Canada, for example, two-thirds of the population takes out private plans to cover vision, dental, and prescription drug benefits — none of which are included in the public plan. Thirty-nine percent of Danish citizens carry private coverage for non-covered benefits including physical therapy.

In other places, this takes the form of supplemental insurance to cover the cost sharing included in the public plan. If you look at France, you see that 95 percent of the population takes out (or receives public subsidies for) private insurance to cover their copayments and deductibles.

Third, there are some countries where private insurance complements public insurance. In these places, residents buy private coverage to gain better, faster access to benefits that are covered in the public system.

Osborn points to England as an especially good example of this type of coverage. About 11 percent of the British population purchases complementary coverage that can get them faster access to specialty doctors or elective procedures.

“The UK is very committed to solidarity and equity in its health system, but at the same time, they are still very comfortable with this private insurance role,” she says. “I think it operates as a safety valve. People use it for elective surgery, for something like a hip replacement where there might be a long waitlist.”

Australia is another example of a country that has really embraced complementary coverage, to the point that 47 percent of the country’s residents carry private coverage alongside their public plans. The government actually encourages citizens to buy a private plan, offering tax rebates to those who enroll — and a lower lifetime premium for those who sign up before they’re 30.
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The debate we’re having around universal coverage in the United States right now often centers on the health care plan offered by Sen. Bernie Sanders (I-VT). His plan — which you can read a longer explainer of here — envisions government-run health insurance that covers a wide array of benefits including vision, dental, and prescription drugs. His plan has no cost sharing for patients — meaning you don’t pay a copayment when you go to the doctor, nor do you have a deductible to hit before your benefits kick in.

The Sanders plan permits supplemental private insurance, the type that covers things that the public system doesn’t. But because the public insurance plan pretty much covers everything, it’s difficult to see what role it would play.

Here’s the thing: None of our peer countries have built a health care system like this. Canada, France, England, Australia, and the Netherlands all run health care systems that have gaps in coverage.

Not one of our peer countries has found a way to provide health care that covers all benefits at no cost to patients — the price is just prohibitive. Instead, most provide free or low-cost access to core medical services while asking patients to kick in something for the parts the government can’t afford.
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