Pros And Cons Of The National Health Insurance Model

The National Health Insurance Model

The National Health Insurance Model is a system that has parts of both the Beveridge and Bismarck models. This model has payments coming from an insurance program run by the government but it uses private-sector providers. This insurance program is something that every individual pays into. Countries that use this type of model are Canada, Taiwan and South Korea. Some pros are that this universal insurance program is usually cheaper since there is no drive for profit or marketing. They are also much simpler compared to insurance programs that operate for profit. There is a lot of market power to ask for lower prices in this single-payer system. So much, that some Americans have resorted to crossing the border

This adds to the long list of items American’s receive from other countries. Not only does the market power keep prices low but costs are also controlled by health insurance plans limiting the types of services they will cover and/or having longer wait times (PNHP, 2010). Sharing information between doctors and hospitals is also easier with a nationalized program (Cain, 2017). It is important to note that while Canada is a single-payer system, there is supplementary private health insurance to include what the universal system lacks. In the United States we see parts of the National Health Insurance Model in Americans over the age of 65 on Medicare (PNHP, 2010).

This system effects the U.S. economy in many different ways. First, as in Canada, an illness with high medical costs will not result in

To make matters worse, health care costs are projected to grow in 2018 (PwC Health Research Institute, 2017). 3 reasons for high health care costs are costs of prescription drugs and new technologies, the increase of chronic diseases, like obesity, and high administrative costs (AFL-CIO, 2017). There are economic costs in health care inflation. Gross domestic product (GDP) growth and employment are lower. How federal spending on health care is financed effects the interest rates and how economic losses are distributed. High inflation on the health care costs reduce the tax base. This forces the federal government to choose between rising expenses and cutting revenues which makes it hard to balance the budget. High health care inflation affects the private economy as well. This increases the incomes of health care workers and proprietors but for those not in the health care business, the health care cost growth increases overall inflation and decreases incomes. In addition, higher inflation raises interest rates. Rising interest rates reduce how much spending a consumer participates in from durable goods, housing activities, business investing. This can also raise the exchange value of the dollar. This encourages imports by making it difficult for exporters to compete with foreign goods. To sum up, higher interest rates that are a result from