In the first 100 days of the Biden Administration, we saw the administration pass policies focused on strengthening the US public healthcare system - such as the temporary boost in the ACA exchange subsidies and expansion of the enrollment period through the summer. While these are minor fixes meant to stymie the dueling healthcare and economic challenges brought about by the COVID-19 pandemic, the question around what fundamental shifts we may see to create a more affordable, accessible, and equitable system still remains.
Our previous post in this series highlighted the many ways countries in Europe have attempted to provide a level of universal health coverage to their citizens. While we saw that none of these systems are without trade-offs, these approaches provide valuable case studies in how governments can provide a basic level of care access without using cost to the individual as a lever to regulate demand like we see in the US.
As the second part of this series, we are turning our attention further east to examine some of the various healthcare systems across Asia which are collectively responsible for providing care to over 4.6 billion people.
South Korea is considered to have one of the most sophisticated healthcare systems in Asia, having managed to implement a social health insurance system that provides coverage to approximately 97% of its population. In South Korea, all residents, including qualified foreign residents, are covered under the National Health Insurance Service (NHIS). Individuals pay premiums for this standard, government-subsidized insurance via a monthly tax based upon their income / property levels. In return, the NHIS covers 50% - 80% of their statutory medical costs (accident, disease and maternity). Those who are unable to pay medical bills due are eligible for government subsidies that cover the cost of care.
Despite this universal healthcare system, many South Koreans still enroll in private, supplemental health insurance on an individual basis or via their employer to receive more comprehensive coverage than what is provided by the NHIS and cover high out of pocket expenses. The supplemental insurance market is highly regulated, with employers having limited flexibility in the designs of medical plans and premium rates for these plans being standardized based on risk factors such as age and gender.
Overall, South Koreans are quite satisfied with their medical care with 55% reporting the quality of care they have access to as being “very good / good” in 2020. Healthcare access however continues to be a problem as the majority of clinicians are located in urban areas, making it difficult for rural residents, many of who are elderly, to receive high-quality medical care. Additionally, there are specific areas of care, such as mental health, where public coverage provided by the NHIS falls short and we see the private insurance market expanding to alleviate the risks and costs of mental illness.
Singapore is ranked as the second most efficient healthcare system in the world due to its strong universal healthcare safety-net. All citizens and permanent residents are enrolled in the Central Provident Fund (CPF), Singapore’s social security savings scheme. Individuals and their employers are required to contribute a monthly percentage of their wages, based upon their age, to the CPF. Funds contributed to the CPF are then allocated into three separate savings accounts dedicated to healthcare, retirement, and other needs such as housing and education expenses. Those who are self-employed or unemployed still have access to the CPF and can make voluntary contributions.
Similar to the US Social Security system, Singaporeans must wait until age 65 to receive monthly payments for retirement purposes from their CPF accounts. However, funds in the healthcare account, known as a Medisave Account, can be accessed at any age to cover hospitalization expenses and qualifying outpatient expenses for contributors and their dependents. Since the CPF is focused on saving for the future, MediSave Accounts are subject to withdrawal limits and have been designed to assist individuals with accumulating 63,000 SGD to ensure sufficient savings to meet basic healthcare needs in old age.
While CPF is considered to be very comprehensive coverage, more than 90% of employers still offer supplement medical benefits to cover out of pocket expenses, including private care, for Singaporeans and foreigners. Employers also frequently offer health and well-being initiatives to their employees as the government will provide grants to incentivize employer-sponsored programs promoting health lifestyles, weight management, smoking cessation, chronic disease management and mental health.
In China, ~95% of the population participates in one of three public health insurance programs: the Urban Employee Basic Medical Insurance (UEBMI), the Urban Resident Basic Medical Insurance (URBMI) or the New Rural Cooperative Medical Care Scheme (NRCMS). Participation in these programs depends on employment status and location of residence. Workers in urban areas are required to participate in the UEBMI program via the contribution of payroll taxes. Comparatively, the URBMI program provides government-subsidized, voluntary coverage for those who are ineligible for UEBMI or unemployed. The NRCMS provides voluntary insurance coverage for rural residents and is subsidized by the central and local government.
There is significant regional variance in the contribution rates, deductibles, and co-payments of these insurance programs as the government subsidizes insurance premiums on a sliding scale from 10% – 80% depending on the overall wealth of provinces. UEBMI and URBMI will partially cover the cost of specific medical treatments and drugs that are delivered by approved public hospitals and pharmacies while all other outpatient fees and long-term hospitalizations are the responsibility of individuals until an annual deductible is reached. Those who can afford to purchase private medical insurance to fill this coverage gap and reduce their risk of facing significant out-of-pocket expenses related to catastrophes and critical illnesses.
While the insured rate in China may seem high, many individuals are still very concerned about their ability to cover healthcare costs as on average ~28% of care must be paid for out-of-pocket, There are also disparities in access to care as rural doctors are often undertrained, causing patients to often travel to seek care at public, urban hospitals. Due to variations in insurance coverage based upon one’s residence, this leaves rural residents at a disadvantage as the plans offered to them by the government do not adequately cover the higher rates charged by urban healthcare providers. Long wait times are also often come as hospitals only represent 3.5% of medical institutions in China yet they handle 45% of all outpatient visits.
The world’s largest single-payer healthcare system can be found in Indonesia in the form of the government run Jaminan Kesehatan Nasional (JKN). Indonesia established JKN seven years ago with the goal of providing insurance that cover basic healthcare needs to all Indonesian citizens and qualified foreigners. Today, the program covers 218 million Indonesians – approximately 82% of the population. This represents 2 times more enrollees than the United States’ largest single payer system, the Centers for Medicare & Medicaid Services (CMS), which comparatively has been in existence for 44 years.
To access JKN benefits, individuals pay a monthly premium that is equivalent to 1% of their wages and their employer contributes 4%. Healthcare coverage is then provided to the employee, a legal spouse, and up to 3 dependent children. Program participants are not required to pay any other fees and can access care for free at public healthcare facilities and a limited selection of private centers. Since JKN only provides coverage for basic medical services and has a limited number of participating providers, 94% of employers in the country also offer employees fully funded private group health insurance to cover hospitalization, outpatient services, dental and vision.
Currently, Indonesia’s healthcare system is looking to re-evaluate how they hope to achieve their goal of offering free basic health insurance. The existing healthcare system has been facing significant deficits and there are infrastructure concerns that still need to be resolved before universal coverage can be achieved. Most notability, fraudulent health insurance claims are common, there are concerns around care quality and accessibility especially in rural areas, and individuals who are either self-employed or unemployed are ineligible to participate in this government sponsored insurance.
Achieving Universal Healthcare
The various healthcare models in Asia demonstrate that there is no one-size-that-fits-all approach to universal healthcare. To achieve universal healthcare, a system must be created where public and private insurance coverage work in tandem rather than against each other. Countries in Asia that have a strong, government sponsored insurance funded by employees and employers in addition to private, group health insurance options may serve as impactful case studies for the US moving forward around how to address these challenges and create a unified insurance system.