Universal Health Care Across the Globe: Costa Rica | Socialized Medicine, but Not Single Payer
I got my start in politics with Howard Dean’s presidential campaign in 2004, and at the time, I was well known among my friends for repeating a line Dean popularized on the campaign trail:
The British and the Japanese and the Germans and the French, the Israelis, the Canadians, the Italians, the Irish, the Norwegians, the Swedes, even the Costa Ricans have healthcare for all their people, and so should we!
The point stuck. Not only was it a shame that the United States did not do so, but Costa Rica showed that you do not need to be a rich European country to have universal health care.
So today, we start our series on universal health care systems around the world with Costa Rica.
Howard Dean - who at the time was running on his opposition to the Iraq war and his accomplishments on health care as governor of Vermont - was proposing a health care plan that expanded existing systems of insurance, both public and private. With that stump speech, Dean was also making another important point: there is no one ‘right’ way to do universal health care; each country finds its own unique way.
Costa Rica’s system is certainly unique. Let’s have a look.
Costa Rican Health Care Coverage System
AT A GLANCE:
System: Multipayer, hybrid, socialized medicine, quite different from no-cost-at-point-of-service systems espoused by single payer evangelists.
Covered services comparable to the ACA’s list of essential health benefits (EHB).
Very low rate of catastrophic medical expenses.
Undocumented immigrants have equal access to coverage and services.
Women’s health and sexual minorities: Abortion is nearly impossible to obtain, and there are no gender reassignment services.
Relatively high out-of-pocket expenses.
Numbers and Outcomes (WHO):
|Measurements||Costa Rica||United States|
|Total population (2016)||4,857,000||322,180,000|
|Gross national income per capita (PPP international $, 2013)||13,570||53,960|
|Life expectancy at birth m/f (years, 2016)||77/82||76/81|
|Probability of dying under five (per 1 000 live births, 2017)||9||7|
|Probability of dying between 15 and 60 years m/f (per 1 000 population, 2016)||126/66||142/86|
|Total expenditure on health per capita (Intl $, 2014)||1,389||9,403|
|Total expenditure on health as % of GDP (2014)||9.3||17.1|
|Per Capita Health Expenditure as % of per capita income||10.2||17.4|
Costa Rica has the top rated health care system in Latin America, and as you can see from the above health summary, it as has good or better broad health outcomes as the United States, with about half as much spent as a portion of income (GDP and per capita income). Over 40,000 Americans travel to Costa Rica each year as medical tourists.
Type of System: Costa Rica has what one may call a multipayer, hybrid, socialized medicine model of health care. Most hospitals are publicly owned and most medical providers work for the government, however, a robust system of private providers exists, including three internationally renowned private hospitals.
Coverage - Who is covered: Although insurance coverage only extends to about 90% of Costa Ricans, the Costa Rican Social Security fund, or Caja Costarricense de Seguro Social (CCSS), mandates free health care services to mothers, children, indigenous people, the elderly, and people living with disabilities, regardless of insurance coverage. Emergency care is free of charge to all residents, regardless of insurance status. Costa Rica’s system is rather progressive in that its insurance system, as well as its free care mandates, cover undocumented immigrants, who comprise 8-10% of the Costa Rican population.
The majority of coverage is provided directly by the CCSS, however, private insurance plays significant role in the Costa Rican health care system. Costa Rica sees a high number of medical tourists - usually Americans - every year due to the reputation of its health care system as top-notch, who use private insurance. In addition, about 30% of the Costa Rican population also accesses health care services through private insurance at least once a year. The vast majority of private insurance plans are offered through a government run insurance company.
In short, although not everyone has insurance, pretty much everyone is guaranteed to receive health care, and that makes the system universal in terms of who is covered.
Coverage - What is covered: Costa Rica has an integrated system, meaning the system of coverage is irrelevant to covered items. All insurance in Costa Rica, and the benefits for those without insurance, are the same. It provides the following coverage:
Actions of promotion, prevention, treatment, and rehabilitation
Specialized and surgical medical assistance
Outpatient and hospital assistance
Pharmacy service for the provision of medicines
Clinical laboratory service and medical examinations
Oral health assistance
Although mental health is not specifically mentioned in the above list, the Costa Rican health care system does integrate mental health, including primary care, hospital care and prescription drugs. That makes the benefits comparable Affordable Care Act’s list of Essential Health Benefits in the US.
However, there are essential health care services completely or completely unavailable in Costa Rica, that are both available and often paid for by insurance in the US:
Abortion is illegal in all cases except to save the life or physical health of the mother.
Gender-reassignment surgery is legal, but not available.
Payer(s) and Funding: It should be noted that by important WHO and UN standards, Costa Rica has done a great job of providing universal health coverage to its residents. About one percent of the Costa Rican population face catastrophic health expenditures in any given year (defined as 40% or more of income remaining after subsistence needs are met).
When all is said and done, the government through the CCSS pays about 75% of the total health care costs for its population, but the other 25% is out-of-pocket expenditure. This is a major difference between the Costa Rican system and the dominant single payer proposals in the United States, which seek to eliminate all out-of-pocket expenses for Americans. As it is, out-of-pocket share of US health spending currently stands at 10%, although the burden on households is much higher (37% of household expenses in the US pay for out-of-pocket medical expenses) due to much higher per capita spending in the US.
Costa Ricans also pay a 15% payroll tax to fund the system. Of this, the employer contribution of 9.5% is significantly more than the employee contribution, 5.5%. Retiree pensions pay into the CCSS pool as well.
There is no denying that the government plays a major part in proving health care to Costa Ricans. Nevertheless, it is significantly different from what is dreamed up by American single payer evangelists. Private insurance plans, along with government-provided insurance - are a significant part of the system, albeit mostly through a government owned company. Contrary to most American proponents of a single-payer, Medicare for All system, point-of-utilization out-of-pocket costs are a part of the Costa Rican system, and for them that seems to work.
Because of the government’s control over the health care and insurance systems, however, important health care services such as abortion, are nearly impossible to get (both by law and in practice). In the United States, given the federal government’s - and that of many state’s - ban on using government funds to pay for it, abortions are largely only possible through private funding and private providers.
The key takeaway from case study of the Costa Rican system is that a multipayer system of financing health care - with the payers being government, well-regulated private insurance and individuals and families (through out-of-pocket payments) works as well as any strictly single payer system in providing quality care and controlling costs.
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