Categories of National Health Insurance Plans

During the ongoing debate over health care reform in the United States, politicians often use the national health insurance systems of other countries as positive and negative examples. Some politicians have maintained that those systems would not work in the United States. Others have said the systems don't even work in their own countries. However, some have claimed that those systems not only keep their citizens healthy, but would also work in the United States.

Bismarck

• This model of health insurance, named for the former Prussian Chancellor Otto Von Bismarck, relies on a system that is similar to the American system. In this system, employers and employees jointly finance "sickness funds," with employees contributing through payroll deductions. Its similarity with American insurance ends, however, with its non-profit status. Though doctors and hospitals tend to be private in Bismarck countries, the insurance system itself is a non-profit government service. This enables the system to negotiate low prices and cover all people. The Bismarck model is used in Germany, Belgium, France, Japan, Holland, Switzerland and to a certain extent, Latin America.

Beveridge System

• The Beveridge system is named after William Beveridge, designer of the U.K.'s National Health system. Under this system, the government pays for everyone's health care in the same way it pays for the police or military -- with tax money. Most hospitals and clinics in Beveridge countries are government-owned. However, many physicians are private. Under the Beveridge system, the government is able to keep prices low because the government controls the level of providers' fees. Other countries using the Beveridge system include Spain, New Zealand, Scandinavian countries and New Zealand.

National Health

• The National Health Insurance model combines elements from both the Beveridge and Bismarck systems. Though it uses private-sector doctors and hospitals, the government pays for their services through a government-operated insurance program into which every citizen pays. With no advertising costs, no profit and no administrators finding ways to deny claims and increase profits, costs for insurance administration are drastically reduced and the overall system is considerably simpler than the American, private insurance system. However, this system also keeps costs under control by limiting which services it will cover and by making patients wait for treatment. Canada, South Korea and Taiwan use the National Health model.

Out-of-Pocket

• In underdeveloped, poorer countries, people pay for the health care they can afford. In other words, those who have money get care, those who don't -- the vast majority of those living in Africa, India, South America and China -- either stay ill or die. Often, residents of the third world villages pay for health care with commodities like corn or dairy products from their one or two cattle. In these countries, hundreds of millions of people live their entire lives without ever visiting a doctor.