Universal healthcare: Pros and cons

Universal healthcare is a system that provides health insurance to all, regardless of their ability to pay. It helps ensure that a country’s residents can access the medical care they need, no matter their financial situation. 

Let’s take a deeper look at universal healthcare. We’ll cover the different types of universal healthcare, its pros and cons, countries that have adopted it and more.

• What is universal healthcare? 
• Pros and cons of universal healthcare
• Types of universal healthcare plans
• Universal healthcare and the U.S.
• What’s next: Navigating medical care without universal healthcare

What is universal healthcare?

Universal healthcare seeks to make accessing healthcare a fundamental right for citizens of a country. Under universal healthcare, everyone can expect to receive the healthcare they need without financial difficulty. 

Universal healthcare is said to date back to 19th century Germany, where a system was set up that required industrial employers to provide healthcare to workers. To do so, employees and employers contributed to “sickness funds,” which they used to pay for care. 

Today, universal healthcare systems exist worldwide, including Australia, Canada, Japan and the United Kingdom.  

Pros and cons of universal healthcare

There are pros and cons to each universal healthcare system. Perhaps that’s why we see such varied systems across the dozens of countries that offer universal healthcare today. Let’s review the pros and cons of universal healthcare. 

Pros of universal healthcare

Maybe the greatest benefit of universal healthcare is that it gives each citizen the ability to access healthcare services regardless of their ability to pay. The World Health Organization argues that healthcare is a fundamental right and that providing citizens with access to healthcare is one of the most important roles of a government.

Lower costs for both citizens and healthcare providers — Under a universal healthcare system, there’s no competition among health insurance companies. Instead, a single governing entity regulates healthcare costs. This can drive the cost of healthcare down substantially. Similarly, it reduces administrative costs for doctors and healthcare practitioners. 

A universal healthcare system could save over $450 billion per year, according to a 2022 Yale study. This could help many, since polls have found that nearly 4 out of 10 Americans have delayed or gone without healthcare because of costs.  

Removing barriers for citizens to grow their careers — Some workers in today’s job market may receive an offer for a higher paying job that would advance their career — yet turn it down because the health insurance is not as good. 

Universal healthcare could remove this barrier, allowing citizens to grow their skills unencumbered by worries about their healthcare costs. 

An overall healthier population — A universal healthcare system has more incentive than a privatized system to direct spending toward preventive measures. 

For example, spending on intervention programs in elementary schools for appropriate diet and exercise may effectively reduce heart problems later in life and associated doctor visits. 

Cons of universal healthcare

From an individualistic perspective, the greatest argument against universal healthcare might be that each individual would likely lose a degree of choice. Under privatized care, individuals can choose their health insurance from different plans that fit their needs. In a universal system, some may want additional coverage. 

Possible lower-quality care — If healthcare providers receive inadequate reimbursement for their costs, they may sacrifice the quality of care or narrow their service offerings. 

Longer wait times — In addition to possibly creating longer wait times for healthcare, universal healthcare could restrict access to certain services, like elective procedures. 

A lack of competition can reduce innovation — Where there’s competition, organizations must search for less expensive or better ways to do things to win customers. Without competition, there may be a lack of innovation to provide new services among providers.  

Types of universal healthcare plans

Although some may associate universal healthcare with a single-payer system, universal healthcare can come in several forms. These include the Beveridge, National Health Insurance and Bismarck models.

Let’s review the different ways that governments provide universal healthcare worldwide.

The Beveridge model

The Beveridge model refers to a healthcare system that is entirely funded by the government via income taxes. Under this model, a majority of health staff gets paid and managed by the government. 

Under The Beveridge model, every citizen has a right to healthcare and can receive services with no out-of-pocket costs. 

• Pros — Low costs and standardized benefits throughout the nation 
• Cons — Funding could decline if a national emergency leads to job losses (since funding comes from income taxes) 
• Countries using Beveridge model — The United Kingdom, Spain, New Zealand and Cuba all use this system 

National Health Insurance model

Under this model, every citizen pays into a publicly run health insurance program, typically through income taxes, and the government uses these funds to pay for healthcare, hence the name “single-payer.” 

Unlike the Beveridge model, a single-payer system uses private-sector healthcare providers. This mix of privatized and socialized healthcare typically keeps healthcare costs low and allows patients to choose their provider. 

• Pros — Low financial barrier to care; patients can generally choose their provider  
• Cons — Potentially long waiting lists for treatment
• Countries using NHI model — Canada, Taiwan and South Korea use this system.  

The Bismarck model

Under this system, employees and employers pay into an insurance system that behaves as a “sickness fund.” Some countries use a single-payer model with only one insurer, while others have multiple competing insurers. The government then tightly regulates prices so insurers do not make a profit. 

• Pros — Private insurance plans cover all employed persons, regardless of preexisting conditions  
• Cons — Employment is required for coverage
• Countries using Bismark model — Germany, Belgium, Japan and Switzerland all use this system. 

Universal healthcare and the U.S.

Unlike many developed countries, the United States doesn’t offer universal healthcare. Instead, the U.S. offers a combination of private insurance and government-run healthcare. About two-thirds of U.S. citizens use private insurance, while the remaining one-third access government-run healthcare. 

The Affordable Care Act is the United States’ attempt to make affordable care available to more of its citizens. Although it’s not universal healthcare, the Affordable Care Act requires all citizens to have health insurance and offers low-income citizens access to subsidized healthcare through Medicaid, a joint federal and state program.

What’s next: Navigating medical care without universal healthcare

Although the U.S. doesn’t have universal healthcare, there are still ways you can try to reduce your costs, for example …

• Deductions — You can keep costs down by exploring healthcare tax deductions. If you itemize your deductions, you may be able to deduct certain medical expenses such as unreimbursed prescriptions, medical appliances and even treatments.
• Negotiating bills — If you need help paying your medical bills, you may be able to negotiate with your healthcare provider. Try contacting your hospital’s billing department to see if you can reduce your medical debt.
• Health savings account — If you receive healthcare through your employer, a health savings account may be a more financially sound option for you. An HSA lets you set aside money on a pre-tax basis to pay for qualified medical expenses.

If you have medical debt, check to see if debt consolidation loans can save you money.