What’s the difference between public and private health insurance?

Understanding different types of insurance for employees.

Stethoscope on a desk

When you manage a distributed team, it’s important to have a sound understanding of the benefits they’re entitled to, including whether they’re eligible for public or private health insurance. The laws surrounding insurance availability vary between nations, so you need to be aware of the guidelines in each country where you have workers when designing a benefits package. Understanding these differences is the key to ensuring every employee receives quality, comprehensive coverage.

What is public healthcare?

Public healthcare, also known as universal healthcare, is provided by a given country’s government. It may be managed by a government agency, tightly regulated private providers, or a combination of both. While this isn’t available in every country, it’s more common than many people believe. Currently, more than 70 nations around the world offer this type of coverage.

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Despite the prevalence of public health systems, it’s important to note that they’re not identical. The details vary between countries: some operate free of charge, while others may have associated fees or options for private supplemental coverage. 

How does private healthcare differ from public coverage?

Private healthcare is managed exclusively by private for-profit providers. It differs from public coverage in several notable ways, though both systems have their pros and cons:

  • More expensive: Public healthcare is generally provided to residents free of cost, while private healthcare is purchased on an open marketplace or paid for through premiums. 
  • Wider range of options: Even though you have to pay for private healthcare, you typically have access to a wide range of policies based on your personal and financial circumstances. 
  • Shorter wait times: Public health insurance can result in long wait times for appointments with specialists, especially if the system prioritizes based on urgency. This can have a significant impact on health outcomes. Private networks allow consumers to research multiple providers to find shorter wait times—subscribers can even work with an out-of-network provider if their policy offers partial coverage for these services.

Employer-sponsored healthcare

In many countries, such as the United States, it’s common but not required for employers to offer healthcare to employees as a benefit. There are many reasons to provide employees with access to group healthcare, such as:

  • Recruiting: Job applicants care about more than just compensation—they’re also interested in benefits, with health insurance at the top of the list. 
  • Retention: A job with good benefits, such as a comprehensive healthcare policy, can help retain employees long-term. 
  • Healthier workforce: You must do your part in keeping your employees healthy and happy. Providing access to medical insurance is one of the best ways to do so because it enables them to seek care when necessary. 
  • Cost savings: Even though it costs you money to offer group health insurance, doing so is less expensive than paying for lost time and productivity due to frequent health-related absences.

Employers may also want to consider the potential tax incentives. For example, you can deduct the cost of premiums from your federal business taxes, reducing your company’s overhead. Depending on the size of your company and annual revenue, you may also qualify for a tax credit. 

Oyster healthcare enables you to offer health coverage to team members in nearly 200 countries. No matter where your employees live and work, there’s a good chance you can provide them access to high-quality group health insurance coverage. 

Better yet, Oyster healthcare works directly with health insurance carriers to bring businesses of all sizes robust plans at an affordable cost.

Are you ready to give Oyster a try?

In addition to Oyster healthcare, you’ll fall in love with other aspects of our global employment platform. It’s designed to help you find, engage, pay, manage, develop, and take care of a thriving distributed workforce.

Gone are the days when hiring local talent was your only option. With Oyster, you can successfully add and manage team memberss anywhere in the world. Sign up for a free account today for access to Oyster Academy, distributed HR tools, and the opportunity to engage and pay your first two contractors. 

From there, you can upgrade to a paid plan that provides access to Oyster health among many other industry-leading products and services. 

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