What is Social Health Insurance
Social Health Insurance (SHI) is a government-managed program in which funding and insurance are pooled to cover participants’ healthcare costs, protecting them against the financial risk of medical emergencies.
This is an initiative in which individual claims are partially dependent on their contributions. The sum can be assumed as an insurance premium to create a common fund from which individuals can be paid benefits.
Major US government programs that include aspects of social health insurance include Medicare and Medicaid. Unemployment insurance and Social Security primarily provide income security rather than health coverage.
Features of Social Health Insurance
Social health insurance is often managed by government organizations that pool risks and resources to provide health coverage to enrolled citizens.
Some of the major features of a conventional social health insurance program include:
- The individual contributes a minimal amount as a premium and this sum never goes beyond their means.
- The benefits, eligibility criteria and other program factors are clearly defined in a statute.
- Specific provisions are made for income and expenses, usually through a trust fund.
- This initiative is typically funded through taxes and mandatory contributions by participants or their employers.
- Participation in SHI is typically mandatory, ensuring broad coverage and risk pooling. Subsidies are available for lower-income participants.
Some of the major social health insurance programs available for citizens in the United States include:
- Social Security
- Medicaid
- Medicare
The Changing Nature of Work, a section of the World Bank’s 2019 World Development Report, defines the need for social insurance models that are dependent on steady wage employment.
These programs are usually founded for significantly large informal industrial sectors in developing countries to remedy the decline in standard employer-employee relationships.
Advantages of Social Health Insurance
Social health insurance is a public insurance initiative that protects participants against economic risk in light of a medical emergency.
Participation in social health insurance plans is usually compulsory. This type of insurance is classified as a form of social security measures adopted by the relevant government.
There are several significant differences between social insurance and public support. One of the most glaring differences that define SHI is that participants’ claims under this type of insurance are treated partly according to their contributions. This can also be termed as an insurance premium.
If the recipient is awarded insurance coverage proportional to their contribution, the social health insurance initiative can be considered a “production activity.”
Sometimes, some individuals receive benefits greater than their contribution, so the government needs to consider redistribution in the government social health insurance program.
The Old-Age Survivors and Disability Insurance (OASDI) Program is the largest social health insurance initiative by the US federal government. It provides income not only for retirees but also to their survivors, especially widows and widowers and people with disabilities.
Workers’ compensation programs are primarily state-managed and provide benefits for work-related injuries and diseases, including medical care. Under this initiative, the program provides compensation to workers who have suffered an injury at work, unemployment insurance, which offers temporary benefits in case of job loss, and Medicare.
The Medicare program provides health insurance primarily to people aged 65 and older, unlike Medicaid, which covers low-income individuals and families. Since its launch, Medicare has swiftly become the second-largest social health insurance program by the US government.
Beneficiaries of Social Security and Medicare include a wide range of income levels, and these programs are designed to provide a safety net for the elderly, disabled, and others regardless of class. However, in reality, these programs cater to individuals who fulfill several different forms of criteria, such as old age or disability.
Why is there a need for a Social Health Insurance program
Social health insurance is initiated to remedy the lack of equitable distribution of resources or benefits in a competitive economy. Such programs include provisions that allow participants to choose a better-suited health insurance plan.
This form of health insurance allows participants to take risks while participating in economic activities with the assurance that, in case of a medical or health emergency, they will be provided monetary compensation through the accumulated funds. Social justice and social stability are two pillars of social health insurance programs.
Conclusion
Social health insurance programs are extremely helpful for the unemployed, including seniors, retirees and disabled individuals.
This initiative is excellent because it ensures that every citizen of the country is covered with comprehensive health insurance that can benefit them in case of a medical emergency.
See Also
Follow us