Pros & Cons of National Health Insurance

National health insurance is important to protecting the physical and financial health of any community. Insurance may pay for preventive procedures and education while also covering the cost of medication and treatment that could otherwise threaten to overwhelm the patient with debt. Providing health insurance is a complex matter, and one that has been at the center of prolonged political debates in nations around the world.

Definition

• National health insurance is a form of universal health coverage. It refers to a national policy that provides health insurance for every citizen and, in some cases, illegal immigrants as well. National health insurance is at least partially government-funded but doesn't necessarily replace private health insurance that consumers may elect to purchase on their own. National health insurance is common in developed nations, who fund the program through taxation.

Types

• Some countries offer national health insurance as a low-cost alternative to private health insurance. In other cases, national health insurance is actually administered by those companies, but extends to every citizen thanks to government subsidies. In the United States, national health insurance exists as limited programs like Medicare and Medicaid. These programs are open to the elderly and low-income citizens, respectively.

Pros

• The primary advantage of national health insurance is that is provides some sort of coverage for everyone. No citizen is at risk of taking on excessive debt due to a sudden illness. National health insurance also may encourage citizens to seek preventive health care, such as the fitness programs and nutrition education that some national health services offer for free. Finally, by adding to competition national health insurance helps to moderate the cost of private health care since consumers always have a low-cost option available.

Economics

• The cost of national health insurance is its largest disadvantage. Insuring a large population can cost billions of dollars, and administration costs add to the burden that a government takes on when it institutes such a program. Governments must fund national health insurance through taxes, or by realizing savings in other areas of a national budget. However, a country that offers national health insurance stands to save money by encouraging early treatment and preventive medicine, which can reduce the long-term costs associated with illness to businesses, insurance companies and individuals.

Cons

• The Insurance Specialists website notes that critics of national health insurance also cite the high level of bureaucracy and inefficiency with which some national health insurance programs operate. This may cut down on a citizen's choices of which doctors to see or what treatments to pursue, or result in long wait times for medical procedures. National health insurance may also be unfair to taxpayers who have no choice but to contribute to the system but have little need for medical care, or buy their own insurance from a private company.