Single-payer health insurance is just one type of health-care system a nation can institute. Single-payer systems are sometimes confused with other types of health care. Some have proposed that the United States should switch to a single-payer-only system for the entire country.

Identification

A single-payer health insurance system works by having the funding for a society's health care collected and distributed to medical providers by a single entity, reports the National Health Care for the Homeless Council (NHCHC).

Features

Single-payer systems are usually handled by the government -- federal and local -- and most of the funding for this type of health-care system comes from taxes, according to the American Medical Student Association (AMSA).

Interesting Fact

The United States has a mostly multi-payer health insurance system and some single-payer programs, according to AMSA. Several different private insurance companies exist to take care of the majority of America's health needs; thus, they are considered a multi-payer system. Medicare (for those 65 and older) is an example of a single-payer system in the U.S.; Medicare health-care providers bill only the federal government.

Misconception

Single-payer health insurance systems are not "socialized" medicine. Medical practices are run by private individuals, but the billing and funding are government functions, reports NHCHC .

Benefits/Disadvantages

Single-payer health insurance could potentially reduce the administrative costs of health care and provide coverage to all citizens. On the other hand, the quality of a single-payer system depends on the government efficiently allocating funds where they are needed, and funds are subject to the state of the economy, reports AMSA.

Source:

National Health Care for the Homeless Council; Single Payer Universal Health Insurance

American Medical Student Association; Single Payer 101