National Health Insurance in Taiwan

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National Healthcare in the U.S. has always been a heated debate nationwide. Despite countless reforms, the United States is still perceived as expensive and inaccessible to a lot of people; even those who are insured under the national healthcare face great limitations in their healthcare options.

Before Obamacare was officially implemented, I was a junior in college who constantly heard objections to any form of national healthcare from my peers. To me the question wasn’t “why should we have a national healthcare?” but more “why did it take so long for us to have a national healthcare?”

To my fellow friends in the U.S, it was hard to convince them that a national healthcare program was feasible; in fact, it has been feasible for many countries for decades. Taiwan where I came from, for example, has national health insurance (NHI) that covers everyone in the nation. It offers great choices of doctors and a variety of service options with short wait time. Best of all, it is affordable.

Before the national healthcare movement, only a little over half of the Taiwanese population was insured by different public insurance schemes. In the 1980s, Taiwan’s economic growth also resulted in a growing demand for affordable health insurance. President Lee Teng-Hui initiated the planning of NHI in 1986, which took about 5 years of drafting and 2 years of legislative work. The execution of the NHI program took place on March 1st, 1995. Keep in mind, Germany, Canada, and many other nations already had a NHI system in place long before Taiwan. Taking their success as an example, Taiwanese crafted a National Healthcare system as a government-run program that was modeled after provincial health plans and a payroll-based premium system. Three years since its inception, 92% of Taiwanese population was enrolled under the newly established NHI. As of 2015, the enrollment has risen to 99.9%. Over 92.6% hospital, clinics and healthcare facilities are affiliated with NHI.

NHI, under the law, cannot operate as a for-profit enterprise. The funding for NHI comes from taxes, premiums from the insured, employers, co-pay, supplemental premium, contribution from public welfare lottery, and cigarette health surcharges. Premium is the primary source of among all the sources. The insured individuals, provider, and the government have a monthly share in premium. The premium for an individual is based on his primary payroll income at 4.91%, in addition to the number of dependents up to three. Co-pay is only responsible by the patients, but is designed to be inexpensive. The primarily purpose is to discourage unnecessary healthcare overuse. To put it in context, a patient pays USD $7 with a referral and USD $12 without for a visit. Co-pay for dental care and traditional Chinese Medicine are always uniformly USD $1.67. Hospital stay and prescription is based on a 10-20 percentage of the overall cost depending on the situation, but Taiwanese NHI has a cap on the total co-pays, so patients will never face bankruptcy. In 2015, the referral system was integrated into the co-pay system, which helps individuals with referrals pay a lower co-pay compare to those without referrals. Furthermore, co-pays are exempted for aboriginal groups, women in labor, veterans low income family, children under 3, or any patients suffering from cancer, tuberculosis, chronic renal failure, and immunodeficiency disorders.

Over the years, Taiwanese NHI has faced its own share of obstacles. Because of such a high NHI utilization rate, and increased traffic to hospitals, there has been a shortage of doctors, nurses and hospital staff. However, in 2001, the majority of the patients are managed via NHI Identification Card (IC). This smart card not only reduces hospital administration work, but also keeps records in uniformity and accessible between hospitals and physicians. According to the IC database, a Taiwanese citizen has an average 14 hospital or clinical visits per year. It’s quite normal for an average Taiwanese doctor to see up to 50 patients in a day, which results in short consultation duration. Each session typically last between 10 to 15 minutes, and is really rarely that a session would take over 30 minutes.

The financial challenges have always been a top priority to overcome. Taiwanese government has to constantly borrow from banks to cover up the expenditures.  The premium rate had always been 4.25% for 7 years since the NHI’s inception. It was later adjusted to 4.55% and then 5.17% in April 2010. After the launch of second-generation NHI in 2013, the premium has been reduced to 4.91% till today. The second-generation NHI collects a supplemental premium of an insured individual’s annual bonuses if it is greater than a quarter of his annual pay, stock dividends, and interest at a rate of 2%. The purpose of this progressive design is to increase the premium on people of wealth rather than those of disadvantage. It is estimated that the supplemental premium should help NHI to be financially sustainable until at least 2017.

Since the launch of the NHI until today, the improvement to the health of the nation overall was remarkable. In addition, foreign nationals are eligible as well after living in Taiwan for 6 months. Inmates are now covered under the establishment of second generation NHI. As for native citizens having emergency procedure while abroad, out-of-pocket expenses can be reimbursed by NHI.

U.S. has always been a leader in the international arena for its patriotic military, technology innovation, and popular sovereignty. Yet, when it comes to its health insurance system, U.S. has fallen behind. While NHI is only available from one provider, it provides individuals with equal access to a variety of services, from different physicians and facilities. U.S., on the other hand, still puts a lot of emphasis on having wide variety of providers and complicated plans to choose from even after its recent health care reform. The hope is that the U.S. will eventually develop a system that is suitable for its own nation by taking examples from different countries to heart. National insurance should be available to everyone. It should include a comprehensive benefit package that allows everyone to have equal access to excellent service options at an affordable price. This is what a good health insurance is all about.


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