What Is Universal Healthcare and How Does It Work?

FT Contributor  | 

Universal healthcare is a system under which all citizens of a given country have access to healthcare. Universal healthcare can take a variety of different forms, including a single-payer system, socialized medicine, a health insurance mandate, and more.

Many countries in the developed world have implemented universal healthcare, with the notable exception of the United States. In America, universal healthcare is still a controversial proposition, although it has become more popular in recent years thanks to advocacy surrounding proposals such as Medicare for All.

Types of Universal Healthcare

There are three main types of universal healthcare: socialized medicine, a single-payer system, and private insurance. Each of these systems differs in the way they pay for and implement universal healthcare, and there are pros and cons to each.

Under socialized medicine, health insurance and healthcare are both provided by the government. Socialized medicine enables the government to control all aspects of health insurance and coverage, and managed correctly, can help to reduce prices and ensure quality coverage for all. The most prominent example of socialized medicine is the National Health Service in the U.K.

Under a single-payer system, governments collect money to fund all healthcare costs. This primarily takes the form of income taxes and other sources of tax revenue. Under the single-payer model, healthcare costs are paid for by the government, but healthcare services are provided by private doctors and hospitals. Prominent examples of single-payer healthcare adherents include France and Canada.

Other forms of universal healthcare may involve the use of private insurance. In this case, the government typically requires citizens to purchase health insurance, and may offer subsidies to lower the cost. The most prominent example of universal healthcare achieved through the use of private health insurance in Germany.

Universal Healthcare Pros and Cons

While universal healthcare has been adopted by many developed countries, it remains controversial in some areas of the world.

Pros of Universal Healthcare

Under universal healthcare, everyone has access to medical treatment. Universal healthcare lowers healthcare costs on both an individual and federal level, and eliminates the many administrative costs of dealing with different insurance and care providers.

Doctors and hospitals communicate directly with the government to receive payment for healthcare services, rather than dealing with the enormous bureaucracy of a variety of different competing insurance providers. This also means that individuals will always have access to healthcare services when they need them, even if they travel out of state or access medical care in a different place than usual.

Universal healthcare also equalizes services so that everyone gets the same level of coverage regardless of their income or employment status. Because healthcare costs are funded by tax revenue paid by individuals throughout the year, most healthcare services are free at the point of service.

There are no exorbitant medical bills that individuals drain their emergency funds for or struggle to pay off at all. This ensures that people get the healthcare they need when they are sick or injured, and helps people access preventative care that is intended to keep them healthier from the start. Providing quality healthcare to all citizens has been shown to reduce social inequality and can lead to a healthier population with greater life expectancies.

Cons of Universal Healthcare

Although universal healthcare has many positive benefits for both individuals and society as a whole, it does come with some downsides. In general, governments that implement universal healthcare are more concerned with preventative and lifesaving healthcare, and may spend less time and resources on rare diseases or elective procedures. In addition, funding universal healthcare can be expensive, and may increase the budget and represent a large fraction of a government’s expenditure each year.

While healthy people may not necessarily need to pay healthcare costs except in the case of an emergency under a private system, under universal healthcare every individual contributes to overall healthcare costs regardless of whether they are sick or healthy. Although in general this means that individuals pay it forward in exchange for quality, affordable healthcare coverage, in practice the contributions of healthy individuals help to subsidize the cost of people with chronic illnesses or disabilities.

Countries With Universal Healthcare

Many countries in the developed world have implemented universal healthcare policies. These include countries such as Australia, France, Canada, Germany, Singapore, Switzerland, the United Kingdom, and more. Countries that have implemented universal healthcare programs have seen benefits including increased life expectancy, reduced social inequality, and healthier citizens.

Healthcare in the U.S.

The United States is one of the only developed nations that does not provide universal healthcare for its citizens. Healthcare tends to be high-cost and low-quality, and is one of the leading causes of financial emergencies in the country. During his presidency, Barack Obama implemented the Affordable Care Act, which attempted to establish a privatized form of universal healthcare similar to systems in place in countries such as Germany and Switzerland. The Affordable Care Act attempted to enforce mandatory health insurance for all citizens. However, many people still chose not to enroll in health insurance through the Affordable Care Act or were unable to afford the cost.

The United States also offers several limited versions of universal healthcare targeted to specific populations. These include Medicaid, which covers low-income citizens, Medicare, which provides healthcare for the elderly, and the Veterans Affairs, which provides healthcare to veterans. In recent years, many politicians have advocated for a version of universal healthcare dubbed “Medicare for All,” which would expand the coverage offered through Medicare to all citizens.


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