Universal Healthcare

THE WORLD HEALTH Organization (WHO) defines universal healthcare coverage as “access to key promotive, preventive, curative and rehabilitative health interventions for all at an affordable cost, thereby achieving equity in access.” Under this definition, a population is said to enjoy universal healthcare if every member of that population is able to obtain access to needed healthcare services. Ordinarily, such services include physicians’ care (including preventive care), admission to hospitals, and supplies of medicine or medical devices. The universal healthcare principle does not necessarily preclude the payment of fees by users of needed healthcare services. However, it does require that such services be available to all, including those who lack the ability to pay.

Because healthcare services are costly, policymakers who seek to implement universal healthcare coverage must decide how to pay for, or finance, its cost. Moreover, in order to control that cost, policymakers also must specify the particular healthcare services that will be guaranteed to all. In its 2000 World Health Report, WHO stated that policymakers should strive “to make funding available, as well as to set the right financial incentives for providers, to ensure that all individuals have access to effective public health and personal healthcare.”

Universal access to healthcare may be financed in many ways. Most often, where it exists, universal healthcare is financed through public social insurance, private health insurance, or some combination of the [Page 1119]two. Under public social insurance plans, governments may provide healthcare services directly to their citizens, or may pay for health services that are provided by third-party caregivers in the private sector. Either way, governments must finance such plans through taxation, borrowing, or the receipt of international aid. If taxation is relied upon, then the form of taxation selected to finance universal healthcare coverage will determine the extent to which wealthier taxpayers will subsidize healthcare for the less fortunate.

Under a health coverage system financed by progressive income taxation, high-income taxpayers will cross-subsidize healthcare for the poor. A universal health coverage system financed by sales or consumption taxes, in contrast, would tend to be less redistributive because wealthy people tend to consume a smaller portion of their incomes than others. Private insurance plans, including group health plans purchased by employers for their employees, are not designed to redistribute wealth.