Against the backdrop of ever-increasing medical costs and aging populations, governments around the world are devising different plans to cope with mounting pressures experienced by their public healthcare systems. And the introduction of compulsory health insurance for all citizens seems to have become a mainstream solution to this problem.
Many countries including , , the United States, , Switzerland , Azerbaijan , and Kazakhstan either have such schemes in place already, or are planning to implement this type of policy in 2019. However, this approach does not come without flaws. A prime example is the Affordable Healthcare Act (a.k.a Obamacare) in the United States, which imposes tax penalties for citizens who do not purchase private health insurance. While the act is well-meaning in itself, it has been criticized for indirectly causing a rise in premiums.
Today, Pacific Prime takes a look at some countries that have implemented mandatory health insurance requirements, and discusses whether their policies are functioning in the ways they were expected to.
The controversy of Obamacare in the United States
The Affordable Care Act (ACA) was signed into law by President Barack Obama on March 23, 2010. This controversial provision stipulates that people who don't have minimum essential coverage are subject to a tax penalty so that there will be enough healthy people enrolled in coverage to balance out the sicker, higher-cost enrollees. To avoid a penalty for having no health insurance, US citizens must have either a valid exemption or be enrolled in a qualified health plan. In fact, the penalty for having no health insurance increases each year, up from USD 95 or 1% taxable income (whichever greater) in 2014, to USD 695 or 2.5% of taxable income in 2018.
In other words, US residents can only enroll in a qualified health plan to avoid the penalty, get cheap insurance that doesn't meet the minimum essential benefits requirements and pay a penalty at tax time, or purchase no insurance and pay a penalty for having no health insurance at tax time.
However, President Donald Trump has eliminated the tax penalty after the end of 2018, so there will no longer be a penalty for people who don't comply, even though they'll be without coverage when they eventually need medical care. The penalty is being eliminated after 2018 so tax returns filed in 2019, which calculate tax for the 2018 tax year, will still include penalty assessments, which is pro-rated for the number of months one is without coverage.
Not only has the Trump government canceled the tax penalty for not having health insurance, but it has also expanded the availability of short-term insurance plans that are not required to meet ObamaCare requirements.
The Obamacare healthcare reform originally required that qualified health insurance plans must cover primary benefits such as maternity treatment, pediatrics, and mental illnesses coverage, and that any non-qualified plans can only last for three months. This new law has been attributed to the rising premiums and excesses as insurers have shifted the increased medical costs to the policyholders.
However, under the current administration, non-qualified insurance policies can now last for up to one year and be renewed for up to three years. The decision has sparked heated debates all over the country. Despite having lower premiums, these short-term plans leave out coverage of certain primary health services, which may be exactly what consumers need, and charge policyholders with pre-existing conditions higher premiums. Insurers have also warned that some healthy people may transfer over to these short-term plans.
Mandatory health insurance coverage in Dubai and Abu Dhabi
In 2013, the Dubai Health Authority (DHA) has stipulated that a level of health insurance that meets or exceeds minimum benefits must be provided to employees and their dependents by
companies, while UAE nationals are covered under government insurance programs like Enaya and Sa'ada.
The extent of coverage for employers and their dependents is determined by the employee's salary, designation, etc. The extent of coverage and type of policy/scheme would determine the cost of their medical services.
In the Emirate of Abu Dhabi, employers and sponsors are responsible for providing health insurance coverage for their employees and their families (1 spouse and 3 children under 18 years of age). In the Emirate of Dubai, employers are required to provide health insurance coverage for their employees. Sponsors are required to get insurance cover for their resident dependents.
From 2014 to 2016, the provision of health insurance cover was rolled out in phases. So far, more than 4 million Dubai residents are covered under the insurance scheme. In a UAE University report in 2018, the universal health insurance for human development in Abu Dhabi and Dubai has been cited as a success by health authorities in the Northern Emirates, who have long called for similar measures to be introduced.
More countries to launch similar plans
More countries are taking action to implement mandatory health insurance in 2019. For example, Kazakhstan's President has agreed to introduce the compulsory social health insurance procedure in 2019.
The compulsory health insurance scheme in Azerbaijan is expected to be fully implemented within the next five years, and the country has already set up The State Agency for Compulsory Health Insurance in 2016. The government hopes that after five years all local citizens, regardless of their financial situation, could apply to get necessary medical treatments.
Oman will also make it mandatory for companies to provide their workers with health insurance from January 2019 if all its requirements are met. It is expected the policy will take place in phases.
Stay tuned to Pacific Prime for more insurance news
Pacific Prime works with over 60 of the world's leading international health insurance providers . Leveraging our extensive experience working with expatriates and local nationals from all over the world to fulfill their healthcare protection needs, we are able to provide some of the most comprehensive health insurance plans available within the market. With the goal of simplifying insurance, our team of experts curates informative weekly and so that our readers can make a more educated insurance decision. today for impartial insurance advice, an obligation-free quote, and a plan comparison.
