Definition

Subsidised health insurance, or social health protection more broadly, may be defined as a series of public or publicly organised and mandated private measures to achieve effective access to affordable healthcare services and adequate sickness benefits for all. To ensure services are affordable, most countries apply a mix of financing methods, such as subsidising the supply of services or the contributions paid, or even both.

Rationale

International standards establish that access to healthcare services without financial hardship should be secured for all members of society, at all stages of life, whether or not they are gainfully employed. Without adequate social health protection, vulnerable individuals face the risk of foregoing necessary care or incurring catastrophic out-of-pocket expenditures. Subsidised health insurance addresses this gap by ensuring that the inability to pay contributions does not constitute a barrier to coverage, thereby protecting household welfare from the financial consequences of illness.

Key Features

• Financing mechanisms: International standards promote collectively financed mechanisms, recognizing recourse to a range of taxes, and contributions made by workers, employers and government. Two main institutional arrangements are recognised:
  1. National health services, through which public entities deliver affordable health interventions directly; and
  2. National health insurance, through which an autonomous public body collects revenues from different sources to purchase health services from public, private, or mixed providers.
• Targeting and subsidisation approaches: To ensure services are affordable, most countries apply a combination of financing methods, including supply-side subsidies (to providers) and demand-side subsidies (covering contributions paid by or on behalf of beneficiaries). Common targeting approaches include:
  • Categorical exemptions: Certain population groups, such as children or older persons, are automatically exempt from contribution requirements.
  • Automatic affiliation: Beneficiaries of certain social protection programmes, such as poverty-targeted social assistance or unemployment schemes, may be automatically enrolled in national health insurance at no cost.
  • Simplified contribution schemes (Monotax): Simplified schemes for small enterprises and self employed often include health insurance coverage in one unified, often concessional contribution that individuals pay jointly for taxes, health insurance and pension insurance.
• Range of healthcare services: Countries should progressively improve the comprehensiveness and level of health care benefits, ensuring higher protection. In accordance with ILO standards, the minimum benefit floor must include at least the provision of essential healthcare as defined nationally, including free prenatal and postnatal care for the most vulnerable. Countries should move towards greater protection for all, as reflected in the Social Security (Minimum Standards) Convention, 1952 (No. 102) and the Medical Care and Sickness Benefits Convention, 1969 (No. 130), which requires the provision in national law of a comprehensive range of services. To be considered adequate, in line with human rights compliance monitoring mechanisms, health services need to meet the criteria of availability, accessibility, acceptability and quality (Recommendation No. 202, paragraph 5a).
• Financial protection standards: Legal entitlements to healthcare should be guaranteed without hardship. Out-of-pocket payments should not be a primary source for financing healthcare systems. The rules regarding cost-sharing must be designed to avoid hardship, with no or limited co-payments and free maternity care.