What is social health insurance?
Social Health Insurance or SHI is one of the organizational mechanisms to pool and raise funds to finance health services, in addition to private health insurance, tax financing, community insurance, and much more.
Generally, in the European systems, self- employed people as well as working people and their staff pays contributions for some services, which are offered to the people who have done the insurance as well as their dependents. Mostly, these contributions have to be paid according to the law.
Most of the governments also pay subsidies in these systems so as to improve or ensure their financial sustainability. Different countries have developed different types of SHI systems. Sometimes the SHI contributions in some countries are held in a single fund and sometimes there are numerous funds for membership competition.
These funds are either run by Para-state or nongovernmental organizations or by the government itself. Moreover, it is ensured that generally the contributions are more from the rich people as compared to the poor people. However, this is not always the case.
Furthermore, the contributions do not usually vary with the health status. This means the sick people are not asked to pay more than the healthy ones. This is done so that the financial risks for care payments are shared across the sick as well as healthy people or across the individuals’ life cycle. There are plenty of ways to pay the providers, ranging from selective contracting at bargained rates to unrestricted fee for services.
Benefits of social health insurance
Whether a SHI is financially viable, supported by all stakeholders, and technically feasible, depends mostly on the height and depth of its coverage. The height of SHI refers to the total cost amount covered by the insurance and the depth of SHI refers to the services that are available under the insurance.
Moreover, the coverage’s breadth is the population that is covered under this type of insurance. In most of the countries, there is an “essential package” that is covered under SHI. Some of the benefits of SHI are:
- No financial hardship for anyone
Social health insurance coverage ensures that all the people in the country can use health services, without any monetary hardship that comes with the payment of these services.
- More access to health services
There are many variations in the coverage of essential health services within a country as well as between different countries. For instance, in few countries, less than 20 per cent of births are looked by an expert health worker as opposed to about 100 per cent in other nations. SHI ensures that all the people of a country can access a wide variety of health services that they require and that too at the right time.
- Decreases poverty
SHI decreases poverty in a nation, as poor people do not have to pay huge amounts of money for health services. SHI also reduces financial risks in a nation. In fact some countries like Thailand are moving towards a health system funded by prepaid funds as compared to out-of-pocket payments. This type of health system is a mixture of insurance contributions and taxes.
- Health costs are shared
SHI shares the costs across the country’s population. Through SHI, people have to make necessary contributions in the form of insurance or taxation, which in turn collects funds for providing health services to everyone in the nation. And, in illness, people can use these funds, irrespective of how much contribution they have made.
So, these are some of the things that you must know about social health insurance. Now, you know what a SHI is and what all benefits it has to the people of a country.