# Universal Healthcare Coverage: What it is, How it Works, Types

## What Is Universal Healthcare Coverage?

Universal healthcare coverage refers to systems in which all residents of a particular geographical area or country have health insurance. An early example of universal healthcare coverage is Germany in the 1880s, when Chancellor Otto von Bismarck introduced a series of bills guaranteeing access to healthcare. Today, most industrialized nations—including France, Switzerland, and the United Kingdom, but not the United States—provide universal healthcare coverage for their citizens.

Although the U.S. leads industrialized nations in healthcare spending, it has worse health outcomes and a smaller percentage of the population is served. Now, the healthcare system is struggling even more under the double burden of the global pandemic and the loss of income from elective surgery and routine medical care that was suspended during the crisis.

One answer to the this crisis, according to everyone from New York City Mayor Bill De Blasio to the World Health Organization and Pope Francis, is to provide Americans with universal healthcare coverage.

### Key Takeaways

*   Many countries have achieved nearly 100% universal healthcare coverage, meaning that all citizens have access to medical and hospital care.
*   Some countries require that everyone purchase private health insurance or face fines or tax penalties.
*   In single payer systems, the government insures everyone, but medical care is in private hands.
*   In socialized systems the government provides insurance and medical care.

## Understanding Universal Healthcare Coverage

There are at least three types of systems that can potentially ensure that everyone in a jurisdiction is [covered for medical and hospital care](https://www.investopedia.com/viral-we-cant-afford-it-medicare-for-all-response-by-gop-rep-sparks-debate-numbers-tell-another-story-11786517). These include requiring or mandating health insurance, providing insurance (but not care) via a single government payer, and socialized medicine, in which both insurance and medical care are managed by the government.

## Types of Universal Healthcare Coverage

### Required health insurance 

Some governments mandate that all residents buy a health insurance policy or face a fine or penalty. The government may subsidize part of the premiums but most insurance is provided by private companies. Germany’s system, for example, includes both for-profit and not-for-profit insurers. Requiring health insurance has helped some countries, including Germany, the Netherlands, and Switzerland, achieve universal coverage.

In the U.S., the 2010 [Affordable Care Act](https://www.investopedia.com/terms/a/affordable-care-act.asp) established a similar requirement and system. The law’s original “individual mandate” levied a tax penalty on people who did not purchase health insurance. The [Tax Cuts and Jobs Act (TCJA)](https://www.investopedia.com/taxes/trumps-tax-reform-plan-explained/) repealed the penalty, starting in 2019.

Some U.S. states (California, Massachusetts, New Jersey, Rhode Island, Vermont) and the District of Columbia levy their own penalties on those who do not buy health insurance. Since 2006, Massachusetts, for example, has required its residents to have health insurance or pay a fine. This has helped encourage insurance rates as high as 95.4% in the state.

### Single-payer insurance systems

Under a single-payer system, all health costs are paid by the government using tax revenue. This allows countries to control costs, in part, by having the government play a stronger role in negotiating prices for healthcare. Health insurance is universal and offered by a single entity. However, medical care itself is provided by private-sector doctors and hospitals.

Examples of this model include Canada and France. In both of these countries, private-sector insurers also exist, but they play a minor role as providers of supplemental coverage.

### National health care systems

In these systems, both insurance and medical care are provided by the government.

In the United Kingdom's National Health Service, for example, the government owns most of the hospitals and employs medical providers. Sweden's publicly funded system mostly provides care through government providers, though private companies play a limited role. Socialized systems are less common than single-payer ones.

> **Important**
>
> The global pandemic has increased pressure on America's very complex and expensive healthcare system, making it more urgent to lower costs and perhaps provide universal healthcare.

## Special Considerations

In the U.S., the ACA increased the number of insured people, but has not achieved universal healthcare coverage. The U.S. Department of Health reported the percentage of U.S. adults without health insurance stood at 8% in 2022. The other 92% of people have health insurance through a mix of government and private insurance providers.

In the world of employer-based insurance, large companies often use a mix of private and self-insurance to cover a percentage of their employees' health costs.

Also, since 2011, the federal government has provided incentives for private insurers to compete against government programs such as Medicare by providing lower costs and more benefits to enrollees. Some of the best Medicare Advantage plans are excellent examples. Recipients of Medicaid choose a private insurance plan for which state and federal governments pay much of the costs.

This mix of approaches may encourage competition and entrepreneurial opportunities, and offer consumers choice and incentives to try to keep healthcare costs down. But [it results in a very expensive healthcare system](https://www.investopedia.com/articles/personal-finance/080615/6-reasons-healthcare-so-expensive-us.asp) that falls short in delivering universal care and on many measures of public health.

These issues are likely to be pivotal ones in the party platforms and 2024 presidential campaign.

> **Article Sources**
>
> 1.  Tulchinsky, Theodore H. "[Bismarck and the Long Road to Universal Health Coverage](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7149836/)." _Case Studies in Public Health_, 2018, pp. 131–179.
>     
> 2.  New York State, Department of Health. "[Foreign Countries With Universal Health Care](https://www.health.ny.gov/regulations/hcra/univ_hlth_care.htm)."
>     
> 3.  U.S. Census Bureau. "[Pandemic Disrupts Some Trends in Health Care Services](https://www.census.gov/library/stories/2021/09/pandemic-disrupts-some-trends-in-health-care-services.html)."
>     
> 4.  American Hospital Association. "[Financial Effects of COVID-19: Hospital Outlook for the Remainder of 2021](https://www.aha.org/guidesreports/2021-09-21-financial-effects-covid-19-hospital-outlook-remainder-2021)."
>     
> 5.  City of New York. "[Mayor de Blasio Unveils NYC Care Card](https://www1.nyc.gov/office-of-the-mayor/news/239-19/mayor-de-blasio-nyc-care-card-details-progress-toward-launch-guaranteed-health-care#/0)."
>     
> 6.  World Health Organization. "[Universal Health Coverage](https://www.who.int/news-room/fact-sheets/detail/universal-health-coverage-%28uhc%29)."
>     
> 7.  Crux. "[Vatican Underlines Support of Universal Health Care Coverage](https://cruxnow.com/vatican/2019/01/vatican-underlines-support-of-universal-health-care-coverage/)."
>     
> 8.  The Commonwealth Fund. "[International Health Care System Profiles: Netherlands](https://www.commonwealthfund.org/international-health-policy-center/countries/netherlands)."
>     
> 9.  The Commonwealth Fund. "[International Health Care System Profiles: Switzerland](https://www.commonwealthfund.org/international-health-policy-center/countries/switzerland)."
>     
> 10.  The Commonwealth Fund. "[International Health Care System Profiles: Germany](https://www.commonwealthfund.org/international-health-policy-center/countries/germany)."
>      
> 11.  U.S. Department of Health & Human Services. "[What is the Affordable Care Act?](https://www.hhs.gov/answers/health-insurance-reform/what-is-the-affordable-care-act/index.html)"
>      
> 12.  Glied, Sherry. "[Implications of the 2017 Tax Cuts and Jobs Act for Public Health](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5944881/)." _American Journal of Public Health_, vol. 108, no. 6, June 2018, pp. 734-736.
>      
> 13.  HealthSherpa. "[Which States Will Charge You a Penalty If You Don’t Have Health Insurance?](https://blog.healthsherpa.com/which-states-charge-you-penalty-if-dont-have-health-insurance)"
>      
> 14.  The Commonwealth of Massachusetts, Office of Consumer Affairs and Business Regulation, Division of Insurance. "[RE: Definition of “Employer” Under Section 3(5) of ERISA – Association Health Plans (RIN 1210-AB85) – Commonwealth of Massachusetts Comments](https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-AB85/00600.pdf)," Pages 1-2.
>      
> 15.  Center for Health Information and Analysis. "[Findings from the 2021 Massachusetts Health Insurance Survey: July 2022](https://www.chiamass.gov/assets/docs/r/survey/mhis-2021/2021-MHIS-Report.pdf)," Page 19.
>      
> 16.  Liu, Jodi L. and Brook, Robert H. "[What is Single-Payer Health Care? A Review of Definitions and Proposals in the U.S](https://link.springer.com/article/10.1007/s11606-017-4063-5)." _Journal of General Internal Medicine_, vol. 32, May 2017, pp. 822–831.
>      
> 17.  The Commonwealth Fund. "[International Health Care System Profiles: France](https://www.commonwealthfund.org/international-health-policy-center/countries/france)."
>      
> 18.  The Commonwealth Fund. "[International Health Care System Profiles: Canada](https://www.commonwealthfund.org/international-health-policy-center/countries/canada)."
>      
> 19.  The Commonwealth Fund. "[International Health Care System Profiles: Sweden](https://www.commonwealthfund.org/international-health-policy-center/countries/sweden)."
>      
> 20.  The Commonwealth Fund. "[International Health Care System Profiles: English](https://www.commonwealthfund.org/international-health-policy-center/countries/england)."
>      
> 21.  Centers for Medicare & Medicaid Services. "[New HHS Data Show More Americans Than Ever Have Health Coverage through the Affordable Care Act](https://www.cms.gov/newsroom/press-releases/new-hhs-data-show-more-americans-ever-have-health-coverage-through-affordable-care-act)."
>      
> 22.  U.S. Department of Health & Human Services. "[New HHS Report Shows National Uninsured Rate Reached All-Time Low in 2022](https://www.hhs.gov/about/news/2022/08/02/new-hhs-report-shows-national-uninsured-rate-reached-all-time-low-in-2022.html)."
>      
> 23.  Self-Insurance Institute of America, Inc. "[Self-Insured Group Health Plans](https://www.siia.org/i4a/pages/index.cfm?pageID=4546)."
>      
> 24.  Centers for Medicare & Medicaid Services. "[Understanding Medicare Advantage Plans](https://www.medicare.gov/Pubs/pdf/12026-Understanding-Medicare-Advantage-Plans.pdf)," Page 9.
>      
> 25.  Health Insurance Marketplace. "[Medicaid & CHIP Coverage](https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/)," Select "Medicaid basics."