Social health insurance is a type of national health insurance that may be administered by the public or private sector, or a combination of the two. Funds may be provided by taxes, government subsidies, private contributions, and employers and employees. People do not make direct payments to an insurance provider under this system. Social health insurance has certain advantages over other programs.
Lower Costs
A major advantage of social health insurance is the pool of contributors tends to be very large, which allows high costs to be spread out and individual contributions to remain relatively low. Contributions do not increase with age, as is common when individuals purchase private insurance, and premiums do not increase due to disease history or determined risk factors. The insurance provider also must charge the same premium to each individual choosing specific options, regardless of age or health condition.
Equity
Under social health insurance programs, insurance providers must accept anyone who applies for membership, as explained by the Board of Healthcare Funders of Southern Africa. They cannot exclude people because of previous illness, family disease history, or any determined risk factors. In these programs, everyone who applies is covered.
Economic Benefits
In a system where employers provide part of the health insurance coverage, these businesses may need to cut costs in other areas when insurance costs rise. They may be unable to provide pay raises and may need to cut staff, as explained by BalancedPolitics.org. Similarly, individuals who must pay more for health insurance have less money to spend on food, clothing, entertainment, vehicles and other products, thus contributing less consumer support for the economy. A social health insurance program is designed to cut health care costs and allow more money to be returned to the economic system.
Focus on Health
Health care practitioners working in a social health insurance system can concentrate on healing patients rather than on the patients' insurance situation and ability to pay. Hospitals and physicians do not turn patients away for lack of insurance, because everyone is covered. This type of program also encourages people to obtain more preventive care, because they typically do not have to pay a deductible or other out-of-pocket costs.
Centralized Database
Social health insurance consolidates health histories and insurance claims in one system, as noted by BalancedPolitics.org, thus eliminating duplicate paperwork and repeated filling out of medical history forms. A centralized national database contributes to accuracy, as patients may forget previous illnesses over time and leave them off forms. Additionally, the social health insurance centralized database provides a better opportunity for analyzing health data and trends on a national basis.
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