Editor's Note: Tsung-Mei Cheng is a health policy research analyst at the Woodrow Wilson School of Public and International Affairs at Princeton University and Co-Founder of the Princeton Conference.
By Tsung-Mei Cheng – Special to CNN
This week’s Supreme Court argument on the constitutionality of the individual mandate, a crucial provision in President Obama’s Affordable Care Act (ACA), reminds me of Taiwan’s experience with that provision in its National Health Insurance Act (NHIA) of 1994.
The NHIA provided Taiwan’s citizens universal health insurance under a government-run, single-payer health insurance system. Today, over 99% of Taiwan’s twenty-three million people are insured.
Premium contributions in Taiwan are based on income and are designed to ensure that health insurance is affordable to all. In Obama’s Affordable Care Act that same principle takes the form of income-based subsidies that can be used to offset premiums charged by competing private health insurers.
In May 1994, Taiwan’s parliament began debate on the National Health Insurance Bill, which Taiwan’s executive branch had drafted. The bill had an individual mandate at its core - as the means to achieve universal coverage.
At the time, 41% of Taiwan’s population had no health insurance and had to pay out of pocket for health care. For those without the means to pay, of course, medical expenses resulted in tremendous hardship. Many households went bankrupt because of the burden of medical bills. Many Taiwanese went without timely and needed health care.
After less than three months of parliamentary debate, parliament passed the bill on July 19, 1994, turning it into Taiwan’s NHI Act, but with a catch – the mandate was gone.
The final moments before passage were tense. A group of protesters, mostly blue-collar workers, swamped the parliamentary chamber where the bill was being debated and threw paper money about. They claimed that the NHI bill would skin Taiwan’s workers ‘twice’ - once by having to pay into Taiwan’s Labor Insurance, which had a medical insurance component, and then again by having to pay into the NHI by dint of the mandate.
Adding to the drama, a legislator unexpectedly burst into the chamber while final reading of the NHI Bill was underway. She had been utside the chamber conferring with pharmaceutical lobbyists who, ironically, were opposing another article in the bill. To gain the right to speak in order to present her argument on behalf of the pharmaceutical industry she first had to pretend objection to whatever part of the bill was being read at that moment. That happened to be the mandate clause. Unwilling to lose momentum, the chamber continued to read and vote on the rest of the bill, until it was passed, at one o’clock in the morning of July 19.
Therefore, by quirk of fate, when the NHI bill was voted into the NHI Act, there was one important difference – the individual mandate was gone. In its place was a new clause for voluntary participation as a compromise.
Taiwan’s public was taken aback by this sudden, drastic outcome. There was a tremendous popular backlash against taking the mandate out. The operability of the NHI Act, which had counted on the individual mandate for equitable and affordable financing, had been immediately thrown into question.
As any actuary will tell us, without mandating everyone to buy at least a basic package of needed health care services, healthy individuals would find it financially advantageous to be without insurance coverage until they fall ill. The only protection an insurer had against this self-serving, adverse risk selection is to base insurance premiums on the health status of individuals, which is something citizens usually abhor.
By September 1994, when Taiwan’s parliament began its new session, it quickly put the individual mandate back into the NHI Act. It realized it could not work without it, and the public was solidly behind it.
The moral of Taiwan’s experience is that the mandate is indeed necessary to achieve universal health insurance and that Taiwan’s parliament saw the wisdom of it before it was too late.
Looking around the world, we see that all other rich, developed nations have individual mandates built into their universal health insurance models. All their citizens and residents enjoy equal access to health care. For example, market-oriented Switzerland has an individual mandate in their health insurance program.
The Swiss health system is completely run by private health insurance and has no public health insurance such as America’s Medicare or Medicaid. Rich and poor Swiss share the same insurance plans, and doctors and hospitals are paid the same fees for treating rich and poor Swiss alike.
In my interview with former Swiss federal health minister Dr. Thomas Zeltner published in Health Affairs, he told me that freedom-loving Swiss “consider the health insurance mandate to be a form of socially responsible civic conduct” and that in Switzerland, ’individual freedom’ does not mean that you should be free to live irresponsibly and freeload from others.” About 45% of the Swiss receive government subsidies to help pay their health insurance premiums.
In elementary school in Taiwan, I remember weekly civic lessons teaching us that with individual citizen’s rights come citizen’s responsibilities. One such responsibility is not to freeload on the rest of society. Soon enough in Taiwan, the individual mandate for health insurance was adopted. Today, Taiwanese accept that citizens’ rights and responsibilities are two sides of the same coin. The NHI remains Taiwan’s most popular social institution.
America is a great nation. The rest of the world admires it for being “exceptional”. But does America really want to be exceptional for having the most expensive health care or for being the only developed country without universal health insurance?
The views expressed in this article are solely those of Tsung-Mei Cheng.
Hopefully Mr. Obama new health insurance bill will be passed if so it will be a major step forward into humanization in that great nation.
Oscar, habibi, what ? Who? humanization?
You are so right. It's time for the medical, pharmacutical and insurance industries to stop "gauging" people with high health costs. This triad as been a monopoly for too long. Affordable health coverage is a human right (compassion) and not a business any more.
Chris, Abdul, you mean "gouging".
join and have fun
Taiwan is a lot smarter than the US.
Calm down, no need to get emotional. Taiwan has a lot of great things as well as a couple of not so great. The sad part about the NHI is that citizens abuse this privilege. It's so cheap to see a doctor that people go to hospital immediately, for a headache (because it's basically free). Not so smart. Quite unbelievable actually. A scratch that needs a band-aid? Nope, off to the hospital with you, because it's free. So, education is the key to implementing these systems. I didn't even get to the abuse of anti-biotics (yep, because it's free).
What is wrong going to hospital for brandaid. I found nothing wrong.
On the other hand, us healthcare system is terrible wrong when people can't get health care due to its high cost or pre-existing condition.
There where very similar problems in every nation that adopted heatlhcare systems. This behaviour is avoidable by educating the population about their new healthcare system and by looking very well at other contries and their healthcare systems. Antibiotics was abused in Europe to an even more massive extend then it is now because of the irrisponsibillity of doctors who did not continue to educate themselfs and who lost uneducated people who just went to another doctor if theirs refused to write them anti-biotics. Their is still a very massive abuse of anti-biotics all over the world.
What about bob the plumber who has a heart attack while at home? He ends up paying the hospital fees (very often in the $100,000 range) and has to take out another mortgage on his house. Doesn't he deserve to have his health care paid for so he can continue to be a productive member of society? or is he doomed to continue scraping by trying to pay for his hospital fees, unable to pay for his kids to go to college. USA might have 300 million people but it doesn't mean they can continue to ignore the entrepreneurs that make the country great. Almost every developed country has universal health care. The need is for more education and more efficient screening when entering a hospital, so that it takes less time, and the non critical cases are pushed to the back of the line. You have a headache? Then you can wait 5 hours in a hospital waiting room and if its still there then ya, maybe you need some attention.
In case you do not know people without health insurance, of which there are many in the US, go to emergency rooms when they have headaches. This contributes to the high cost of health delivery in the US. That cost increases further when the insurance companies profits are added. To maintain those profits, the companies have to refuse insurance to sick people.
Without mandate the cost of health insurance will increase to the point that many employers who carry insurance now will be forced to discontinue it.
The abuse of the antibiotics is not possible cause the NHI always take back the things that they considered "not reasonable", however, every case has different criteria. For example, a patient with blood sampling, some get the full payment from NHI and some get the payment for "Na" and some get "Cl". Even the NHI doesn't know why there's difference.
So many Asians go to the hospital for a cold. This is nothing new.
Do you know on average how much time the doctors spend with each patient in Taiwan? LESS THAN 5 MINUTES.
You think doctors in US spend more than 5 minutes with their patients? That's not my experience. You spend 1 hr in the waiting room, followed by 15 minutes with the nurse, followed by another 1/2 hour wait in the treatment room. Then you see the doctor for 5 minutes, max! This is how treatment works at a typical private clinic in the US.
But in Taiwan you don't wait that long and you will know how long you have to wait because they post a list of patients waiting to be seen by the same doctor. If the list is long then you know you have a long wait. In the States, you will never know why. And many doctors in Taiwan won't even take breaks if they know they have a long waiting list. Of course there are others that do.
At the end it is society as a whole with some level of self-awareness and responsibilities that will make the system work. Do you think many US citizens will not freeload? Look at how many that would rather take the social welfare system than make things work for themselves. Maybe that is why some opposed to the universal health care plan think it will not work – they already know the type of citizens we have in the US. Maybe it's time to educate people what "responsibilities" means – the politicians don't do a good job setting examples, too many finger-pointing.
The Swiss health insurance scheme makes up of a basic package of needed health care services. The more sophisticated your needs – like a single room in a public hospital of your own choice etc. – are, the higher premium you have to pay. Nevertheless there are privately-run hospitals that can be compared to 5-star hotels.
And, what is the point you are making?
I'm totally laughing my bum off reading the above article. To try and use Taiwan's system as a persuasive argument for the health mandate is incredible. Really is Taiwan anything like the USA? Not at all! Facts: Per capital health costs were a mere $951 in 2009. Taiwan also has a strong focus on Chinese medicine, not western mediceine. Doctors can be penalized for seeing too many patients or offering services, even when those services are valid Selection of services is controlled by the government system. Premiums are regulated by the govt system and they aren't taking in enough to cover services and are borrowing from banks to do so,. There is no system to regulate systematic reporting of clinical performance, patient outcomes or adverse events.
America is full of a lot of people wanting Obama care and I can assure you the ones that are diseased will cost a hell of a lot more than $951 a year in health care costs and the so called community plan that Obama's Law requires will not decrease premiums it will increase premiums for everyone. Sick and diseased people are costly, very, very costly.
So go ahead and use Taiwan and a shining example of what lies ahead for America if we try to equalize our health care. I for one, will go to Costa Rica for health treatment if I need it!
The last sentence is great albeit, I guess, not intended to sound this way.
"The rest of the world admires it for being “exceptional”." Somehow sounds like " Our child is really special " with special meaning being in "special education" ;)
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