Page 220 - India Insurance Report 2023- BIMTECH

208 India Insurance Report - Series II

The famous Beveridge model, or the National Health Service (NHS), UK, was created in 1948
based on the recommendations of a report to Parliament by Sir William Beveridge in 1942 (Beveridge,
1942). NHS provides healthcare services to all its citizens based on clinical need and not ability to pay.
It works to reduce health inequalities by providing comprehensive coverage centred around its people’s
needs. The U.K.’s Total healthcare expenditure in 2021 was £280.7 billion, equating to £4,188 per person,
accounting for 12.4% of gross domestic product (GDP) in 2021. Government-financed healthcare
expenditure was £233.1 billion in 2021, constituting 83.0% of total healthcare spending and equating to
£3,477 per person. The share of Voluntary health insurance accounted for 2.4% of overall spending on
healthcare, amounting to £6.9 billion. It increased by 13.0% in 2021 in real terms. The out-of-pocket
expenditure, from elective treatments, medical goods, and other health services and products, accounted
for 12.7% of overall healthcare spending or £35.6 billion. The government’s effort to increase spending
on preventive care ( £35.1 billion in 2021) in response to the coronavirus (COVID-19) pandemic was
worth noting. (Office for National Statistics, 2021).

In Germany, Health insurance is provided by two subsystems: statutory health insurance (SHI), consisting
of competing, not-for-profit, nongovernmental health insurance plans known as sickness funds, and Germany’s
total health expenditure is 474 bn euros, which is 13.2% of GDP and 5699 euros per person (Federal Statistical
Office of Germany, 2021). They are popularly known as the Bismarck Model, which emerged in 1883 as the
world’s first social health insurance system. State health insurance, known as Gesetzliche Krankenversicherung
or (GKV) covers 92% of beneficiaries and provides inpatient, outpatient, mental health, and prescription drug
coverage. They are maintained and delivered by nongovernmental insurers known as sickness funds. It is a
universal, multi-payer system, extensively funded by the government and general wage contribution. Being
organised on the solidarity principle, the contributions are sought on the ability to pay instead of the insured’s
income – the cost is divided between the employer and the employee. The rest of the population is covered by
private health insurance, which is in the nature of substitutive coverage purchased by individuals who are
either excluded or want to opt out of SHI. An individual with an income greater than €57.600 per year, or
€4.800 per month, can opt for private health insurance. Around 100 different ‘Krankenkassen’ or “sickness
funds’ offer extensive choices to the German population (GKV,2023). In 2022, around 74 million people, or
90% of the population in Germany, were covered by statutory health insurance (GKV). Private health insurance
(PHI) covers around 8.7 million people or around 10.5% of the German population. (German HealthCare
Statistics, 2022). Those who opt for private insurance pay a risk-related premium. The risk is calculated only
when taking the first policy - based on lifetime underwriting. Private health insurers often rope in youngsters
with deep pockets, providing them with extensive services and lower premiums. For sickness fund enrollees,
private insurance offers both complementary and supplementary services, covering minor ailments not covered
by SHI. It provides additional services by covering co-payments and expenses for private hospital rooms.

USA - Despite the most healthcare spending per capita or as a percentage of GDP, nearly 8.4% or
27.6 million Americans of all ages were without health insurance in 2022. In the same period, 4.2%, or
3 million children, were uncovered by health insurance. In 2022, Private health insurance dominated by
covering two-thirds of people under age 65; the rest, around a quarter (27.8%), were covered by public
health insurance. (National Centre for Health Statistics, 2022). In the USA, universal health coverage is
provided through Medicare to all people aged 65 and above. Another universal coverage is Medicaid,
which covers low-income families, the blind, individuals with disabilities, low-income pregnant women
and infants, and children up to age 18.