Taipei Times
Mar 19, 2005
Experts call for health premium hikes
By Wang Hsiao-wen
Although the rest of the world envies Taiwan for its success in providing easy, affordable and universal healthcare, Taiwan’s NHI is suffering from a recurrent financial crisis that also besets other nations like the UK, US, Germany and South Korea. As in these countries, health insurance is a highly politicized issue in Taiwan.
“Taiwan NHI’s financial problems stem from two factors: people’s mindset and
politicians’ intervention,” said William Hsiao, a professor of economics at
Harvard University who helped design the NHI a decade ago.
“Taiwanese people think that they don’t need to pay more since they’ve got NHI. In fact, the rise of insurance rates is an inevitable trend as the society grows older, richer and demands more medical care,” Hsiao said.
As Taiwan matures from a one-party state to a vibrant democracy, the insurance rate has increasingly become a bargaining chip in party politics, according to Hsiao. When the financing of the NHI was legislated under an authoritarian system, the executive branch was empowered to raise the premium rate whenever the program faces a deficit. But when faced with the opposition-dominated Legislative Yuan that now exists, the executive branch has lost its power and political conflicts flare up.
“The solution is to revise the law to allow insurance rates to edge up automatically,” Hsiao said.
Although politicians usually follow the “no premium raise” mantra to pander to potential voters, experts from other countries suggested that a fare hike, if well managed, would not trigger strong opposition from consumers.
Uwe Reinhardt, a professor of political economy at Princeton University, agreed that a premium increase would be a good way to sustain the universal insurance plan.
“Taiwanese could pay twice the fee now without hurting its macroeconomics,”
Reinhardt said.
Official figures showed that Taiwanese people pay 15.4 visits to physicians per year and that the country spends about 6 percent of GDP on healthcare —
a relatively low figure compared to the US’ 15 percent.
Reinhardt said that the real issue is to share the insurance burden and foster a spirit of fraternity.
“While 80 percent of health spending is used on 20 percent of the population who are severely or chronically ill, it is only natural that not every one feels their money is fully spent on their own health,” he noted. On the sideline of the NHI’s financial difficulties, Reinhardt advised Taiwan to steer away from the US example where many families go bankrupt because of health costs.
“Privatization of health insurance won’t solve the financial deficit. It just sweeps the problem under the rug,” he said. “The competition between insurance companies only makes programs less affordable, [and] over 46 million Americans are not covered.”
http://www.taipeitimes.com/News/taiwan/archives/2005/03/19/2003246881
Comment: So funding of a single payer system is political. But imagine debating whether 6% of the GDP is an appropriate level of funding for an established, comprehensive national health insurance program. Contrast that with 15% of the GDP being used for a deficient, fragmented program that sweeps the problems under the rug.
The current political debate over Social Security is instructive. When the people really understand the issues, they’ll support solidarity. Now they merely need to understand single payer national health insurance. And it’s our job to make sure that they do.