What is Public Health Insurance?

Public health insurance is insurance that helps meet part or all of medical costs and that is administrated by a government. There are many different public health insurance programs in a number of countries. In the US, Medicare, Medicaid and the State Children’s Health Insurance Program (SCHIP) are examples. These cover certain parts of the population who qualify by age, disability, or income. Many other countries extend coverage to most or all of their citizens. Such insurance plans occur in the UK, France, Canada, and the Netherlands, for example.

There are different ways in which public health insurance may share costs of medical care with participants or citizens. In some cases, taxes of all people help to fund a public plan, even if not everyone is eligible to participate in that plan. This is the case with the public plans run in the US as of summer 2009. There is considerable talk about opening up a larger public health insurance plan, run in a similar way to Medicare, where any citizen could enroll.

Taxes alone may not fully fund public health insurance. Sometimes enrollment also requires an enrollment fee, and it might require small to large copayments or coinsurance payments at point of service. Again, programs like SCHIP rely in part on small monthly insurance payments by parents of qualifying children, and people in the US with Medicare pay for parts of their coverage, unless they have very low income. Coverage also isn’t total, and monthly insurance payments may still be required to maintain coverage.

Only Medicaid, which requires no copayments and no monthly fees, fully fits the definition of public health insurance, as some understand it. Yet is limited to those people who either meet income requirements or who qualify for Supplemental Security Income (SSI). There are many who criticize these plans as socialism where all must pay for a few, and others who criticize them because they are not far-reaching enough and do nothing to address the plight of the 47 million Americans who are not insured.

In other countries, virtually all people pay into a public health insurance fund through taxes on earnings or profits. There’s some criticism that those who don’t pay any taxes don’t contribute. This is only part of the way the government must handle the costs of medical care for its entire people. A government also must work with any deliverer of medical services (doctors, hospitals, pharmacies, medical supply companies, etc) to negotiate reasonable costs. This is by far much easier, when the full weight of a large country performs these negotiations, and many countries are quite good at bringing costs of what a number of people think are inflated prices, lower.

Governments may also need to determine what services get priority coverage and what services don’t get covered at all. When citizens in countries that don’t have a total public plan in place think about this issue, it often frightens them. One of the main concerns is the idea of “rationing” where health care isn’t given when needed, or when people wait for long times to get required care.

There is a constant meme regarding this in the US among those who oppose any form of public health insurance, usually citing Canada as an example. Though there are certainly stories of Canadians paying out of pocket to have a surgery in the US, many agree that the examples tend to be exceptions to the rule, rather than the rule. A number of Canadians cite high degree of satisfaction with their medical care.