Universal health care vs. insurance

Universal healthcare is something that is implemented in almost every Western industrial country, with the glaring exception (for now) of the US.

The basic idea is simple: The government realizes

• That the economy is better off if everyone is able to work at their absolute best, and that people can only do that if they're healthy, and if they know their family members are also not about to die
  
• That having people die because they can't pay for treatments that exist and could help them, is totally not cool*
• That illnesses don't discriminate - the rich and the poor can both get cancer, for example, equally easily, but the treatments are so expensive that only the rich can afford them

With these realizations, the government decides that it would make sense if everyone could afford medical care - both doctors visits to catch problems early, and more advanced treatments so that problems that do arise can be sorted out. So they say, "Let's push taxes up a bit to cover the cost, and then pay for whatever healthcare anyone in the country needs!"

Implementation differs in every country, but in general it works well.

Some other advantages are:

1. Lower medical costs - since government is paying, it can negotiate directly with drug companies for mass discounts on drugs. PHARMAC does this in NZ.
2. Better public health - since people can afford to get to the doctor early to catch problems before they become serious

Critics usually argue that:

1. There are long wait times for some procedures
2. Taxing everyone is not fair, since many people will go their entire life without needing the services they're paying for
3. It is wasteful, since hypochondriacs will take advantage of the system and go to the doctor for the slightest little issue
   

(1) is sometimes true, based on need and available facilities. (2) is a matter of opinion. (3) is true, and some systems take steps to mitigate it. Taiwan, for example, requires a small co-pay for each visit to a medical facility. When I needed a cyst in my knee taken out, I had to pay NT$200 (NZ$8) for the doctor's visit and referral, then NT$400 for the surgery at a different hospital, then NT$200 for a follow-up visit. It is very affordable for most people in the country, but serves to prevent many frivoulous visits to the doctors.

In a very basic nutshell, that's what universal healthcare is.

Insurance is the model used in the US: you pay X amount per month, and the insurance company will pay for your treatment when you need it, in theory.

Insurance works well for cars: Not every car will be involved in an accident, and it is possible to prevent car accidents to some extent by driving carefully. There is thus less risk, and so premiums can be quite low for good coverage.

Healthcare, on the other hand, is much riskier: Most people will get sick, and will need to claim from their insurance. Medical costs can also run into the millions of dollars in some cases, and as a result, premiums have to be higher.

Insurance companies also have a profit motive: every cent not paid to policyholders is another cent of profit, so companies may hire people to find ways to deny policyholders' claims if they get too expensive.

That's universal healthcare and insurance according to my understanding having lived in countries with both types of systems.

* They probably word it a bit differently though :-P