Social health insurance is a method for financing health care costs through a government-based social insurance program based on the collection of funds contributed by individuals, employers and sometimes by government subsidies.
The governments and public employees are covered by social health insurance. Social health insurance consists of sickness funds that are made by a proportional contribution of their members’ wages. This type of social health insurance in the form of sickness funds covers the medical costs of their members. It may also include some national benefit package.
Social health insurance is meant to provide financial assistance to people at times of need. It is for this purpose that social health insurance has been started in various developed as well as developing countries. It is no wonder then that government of every country is trying to pursue its goal of a social health insurance through the generation of income cross subsidization, risk cross subsidization, mandatory cover, and development of low income schemes and addressing the inefficiencies in the private sector.
The World Health Organization is constantly stressing on the need of introduction of social health insurance in various countries of the world. In the year 2000, the World Health Organization reviewed the health systems of 191 countries on some aspects like responsiveness, fairness of contribution, levels of health achieved, and the overall health system achieved compared to health system expenditure. It was found that South Africa ranked 175th due to its lack of efficiencies in both the private and the public sector.
Thus the need of a social health insurance is always there for the overall positive health outcome of the people world-wide.