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 a 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 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. According to the U.S. Census Bureau, there were 28.1 million Americans without health insurance in 2016, a sharp decline from the 46.6 million who had been uninsured prior to the implementation of the Affordable Care Act (ACA).

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 28.5 million uninsured in the U.S. includes a significant number of undocumented immigrants. 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 there is one entity—usually the government— responsible for paying health care claims.

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) are not part of a single-payer system, and their health insurance is not government-run. In these markets, thousands of separate, private insurance companies are responsible for paying members' claims.

There are currently at least 16 countries that offer some form of a single-payer system, including Canada, Norway, Japan, Spain, the United Kingdom, Portugal, Sweden, Brunei, and Iceland.

Two-Tier Health Care

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 with secondary coverage available for those can afford a higher standard of care.

Denmark, France, Australia, Ireland, Hong Kong, Singapore, and Israel each have two-tier systems.

While Medicare operates similarly in the United States, the supplement Medigap coverage is offered and managed by a private health insurer rather than the government.

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.

In the United States, the Veterans Administration (VA) is an example of socialized medicine.

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.

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. It is a challenge faced by the VA as well as governments like South Africa that struggle with a crumbling healthcare infrastructure in the face of extreme poverty and a high employment rate.

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 several years 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 his in 2016 presidential bid (and one incorrectly labeled "socialist" by most in the Republican Party.)

Health Coverage Around the World

According to data from the Organisation for Economic Co-operation and Development, several countries have truly achieved universal coverage with 100 percent of their population covered.

Today, 32 countries offer universal health coverage, in some form: Australia, Austria, Bahrain, Belgium, Brunei, Canada, Cyprus, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Israel, Italy, Japan, Kuwait, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Singapore, Slovenia, South Korea, Spain, Sweden, Switzerland, the United Arab Emirates, and the United Kingdom.

In contrast, only a little over 91% of the U.S. population was insured in 2017, and the U.S. Census indicated that the percentage of Americans with health coverage was about the same in 2018.

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 as of 2014, only about 11% 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 8 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 (as is the case with insurance plans purchased through the ACA health exchanges in the United States). As a result, the amount people have to pay for their healthcare in Singapore is much lower than it would be under a 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 we have 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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