Differences Between Universal Coverage and Single-Payer

Health care reform has been an ongoing debate in the U.S. for decades. Two terms that are often used in the discussion are universal health care coverage and single-payer system. They're not the same thing, despite the fact that people sometimes use them interchangeably. 

While single-payer systems generally include universal coverage, many countries have achieved universal or near-universal coverage without using a single-payer system. Let's take a look at what the two terms mean, and some examples of how they're implemented around the world.

Universal Coverage

Universal coverage refers to a health care system where every individual has health coverage. This can be accomplished under a government-run health coverage system, or a private health insurance system, or a combination of the two.

According to the U.S. Census Bureau, there were 26.1 million people in the U.S. who had no health insurance coverage in 2019. This is far lower than the 45.6 million people who were uninsured in 2012, before the bulk of the Affordable Care Act (ACA) was implemented, but it's clearly not universal coverage. For many years, the lack of universal health coverage has made the U.S. stand out from other similarly-developed countries.

In contrast, there are no uninsured Canadian citizens; their government-run system provides universal coverage. Thus, Canada has universal health care coverage, while the United States does not.

It is important to note, however, that the uninsured population in the U.S. includes a significant number of undocumented immigrants, who are ineligible to purchase (even at full-price) health coverage in the exchange, and are ineligible for Medicaid. Canada's government-run system does not provide coverage to undocumented immigrants.

Single-Payer System

On the other hand, a single-payer system is one in which the government is responsible for paying health care claims, using money collected via the tax system. So the government is the only (ie, single) payer.

There are currently at least 17 countries that use a single-payer system, including Norway, Japan, United Kingdom, Kuwait, Sweden, Bahrain, Brunei, Canada, United Arab Emirates, Denmark, Finland, Slovenia, Italy, Portugal, Cyprus, Spain, and Iceland.

But single-payer systems can also be implemented without covering the entire population. So a country can have one or more single-payer programs and still not achieve universal coverage. This is what we see in the U.S., with a combination of single-payer coverage for some people, private coverage for others, and tens of millions of people who have no coverage at all.

In the United States, Medicare and the Veterans Health Administration are examples of single-payer systems. 

Medicaid is sometimes referred to as a single-payer system, but it is actually jointly funded by the federal government and each state government. So although it's a form of government-funded health coverage, the funding comes from two sources rather than one.

People who are covered under employer-sponsored health plans or individual market health plans in the U.S. (including ACA-compliant plans sold in the health insurance exchanges) are not part of a single-payer system, and their health insurance is not government-run. In these markets, hundreds of separate, private insurance companies are responsible for paying members' claims.

Two-Tier Systems: Public Plan Supplemented With Private Coverage

In most cases, universal coverage and a single-payer system go hand-in-hand, because a country's federal government is the most likely candidate to administer and pay for a health care system covering millions of people.

It is difficult to imagine a private entity like an insurance company having the resources, or even the overall inclination, to establish a nationwide health care coverage system.

However, it is very possible to have universal coverage without having a full single-payer system, and numerous countries around the world have done so. Some countries operate a two-tier system in which the government provides basic health care via a single-payer system, with secondary coverage available for those can afford a higher standard of care.

Two-thirds of Canadians, for example, purchase supplemental private coverage for dental, vision, and prescription drugs, because the government-run plan doesn't provide those benefits. And in France, nearly everyone has supplemental coverage that pays the out-of-pocket medical costs (deductibles and copays) that they would otherwise have to pay under the government-run plan.

This is similar to Medigap coverage in America, for people covered under Original Medicare. The government provides Original Medicare coverage, but it does not have a cap on how high out-of-pocket costs can be. So most Original Medicare beneficiaries rely on some form of supplemental coverage—from an employer or former employer, Medicaid, or privately-purchased Medigap policies. (Note that Original Medicare is comprised of Medicare Part A, which covers inpatient care, and Medicare Part B, which covers outpatient/physician services; most enrollees get Part A without a premium, but there's a monthly premium for Part B.)

Socialized Medicine

Socialized medicine is another phrase that is often mentioned in conversations about universal coverage, but this model actually takes the single-payer system one step further. In a socialized medicine system, the government not only pays for health care but operates the hospitals and employs the medical staff.

A country can adopt a single-payer approach (ie, the government pays for medical care) without a socialized medicine approach.

In the United States, the Veterans Administration (VA) system is an example of socialized medicine, but Medicare is not.

The National Health Service (NHS) in the United Kingdom is an example of a system in which the government pays for services and also owns the hospitals and employs the doctors.

But in Canada, which also has a single-payer system with universal coverage, the hospitals are privately operated and doctors are not employed by the government. They simply bill the government for the services they provide, much like the American Medicare program.

The main barrier to any socialized medicine system is the government's ability to effectively fund, manage, and update its standards, equipment, and practices to offer optimal health care.

Challenges in the United States

Some experts have suggested that the United States should incrementally reform its current health care system to provide a government-funded safety net for the sick and the poor (sort of an expanded version of the ACA's Medicaid expansion) while requiring those who are more fortunate health-wise and financially to purchase their own policies.

However, the political gridlock that has been in place over the Affordable Care Act over the last decade makes it difficult to imagine such a proposal gaining enough traction to pass. But it is technically possible to construct such a system, which would provide universal coverage while also having multiple payers.

While it is theoretically possible to have a national single-payer system without also having universal health coverage, it is extremely unlikely to ever occur because the single-payer in such a system would undoubtedly be the federal government. If the U.S. federal government were to adopt such a system, it would not be politically viable for them to exclude any individual citizen from health coverage.

Despite this, a growing number of congressional representatives have called for the establishment of "Medicare for All," a proposal popularly endorsed by the supporters of Vermont Senator Bernie Sander in his presidential campaigns.

While the term "Medicare for All" is often use to describe a program under which the U.S. government would provide coverage to all American citizens, there are different approaches that have been proposed and they would all include more robust coverage than the current Medicare program provides. These approaches have been incorrectly labeled "socialist" by many Republican members of Congress, but none of the current Medicare for All proposals would incorporate socialized medicine.

Health Coverage Around the World

The Organisation for Economic Co-operation and Development includes 38 member countries. Most of them have achieved universal coverage with 100% of their population covered by core health benefits. But in seven of the countries (Chile, Estonia, Hungary, Mexico, Poland, the Slovak Republic, and the United States), less than 95% of the population has comprehensive health coverage.

According to recent U.S. Census data, only 92% of the U.S. population was insured in 2019. The U.S. is near the bottom of the OECD countries in terms of the percentage of its residents with health coverage, but it also spends far more of its GDP on health care than any of the other member countries.

Let's take a look at the various ways that some countries have achieved universal or near-universal coverage:


Germany has universal coverage but does not operate a single-payer system. Instead, everyone living in Germany is required to maintain health coverage. Most employees in Germany are automatically enrolled in one of more than 100 non-profit "sickness funds," paid for by a combination of employee and employer contributions.

Alternatively, there are private health insurance plans available, but only about 10% of German residents choose private health insurance.  


Singapore has universal coverage, and large health care expenses are covered (after a deductible) by a government-run insurance system called MediShield. But Singapore also requires everyone to contribute 4% to 10.5% of their income to a MediSave account.

When patients need routine medical care, they can take money out of their MediSave accounts to pay for it, but the money can only be used for certain expenses, such as medications on a government-approved list.

In Singapore, the government directly subsidizes the cost of health care rather than the cost of insurance (in contrast with the approach that the United States takes with coverage purchased through the ACA health exchanges, in which the cost of the health insurance is subsidized). As a result, the amount people have to pay for their healthcare in Singapore is much lower than it would be under the U.S. model.


Japan has universal coverage but does not use a single-payer system. Coverage is mainly provided via thousands of competing health insurance plans in the Statutory Health Insurance System (SHIS).

Residents are required to enroll in coverage and pay ongoing premiums for SHIS coverage, but there is also an option to buy private, supplemental health insurance.

By implementing a less burdensome single-payer model (rather than the separate government, private, and government-linked private health insurance mechanisms that are used in the United States), governments like Japan are able to better streamline their national healthcare delivery.

United Kingdom

The United Kingdom is an example of a country with universal coverage and a single-payer system. Technically speaking, the U.K. model can also be classified as socialized medicine since the government owns most of the hospitals and employs the medical providers.

Funding for the U.K. National Health Service (NHS) comes from tax revenue. Residents can purchase private health insurance if they want to. It can be used for elective procedures in private hospitals or to gain faster access to care without the waiting period that might otherwise be imposed for non-emergency situations.

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13 Sources
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