Social health insurance (SHI) refers to a method of covering the healthcare costs from the funds collected from individuals, employers or government subsidies. There are three different ways of collecting funds for healthcare systems. It can be collected through private contributions, social health insurance contributions or taxes.
Social health insurance generally will have a sickness fund where its members contribute some amount from their wages. With the help of these contributions, this insurance generally pays a portion of the medical costs of its members. Social health insurance system is said to have presented in continental Europe.
Some of the important features of SHI are there should be compulsory and regular contribution from all of its members. It is legislated by government. There is no provision for opting out of the scheme. Eligible members are always covered by the scheme. They cannot be excluded. Premiums are generally calculated according to the income of members. But the benefits are common for all.
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