Does Universal Health Insurance Make Health Care Unaffordable? Lessons From Taiwan

TLDR

Taiwan’s National Health Insurance, a universal single‑payer system launched in 1995, provides comprehensive coverage for all residents. The study investigates whether the NHI has driven health spending to unaffordable levels and examines its benefits. The NHI successfully contained spending inflation, with savings offsetting the cost of covering the previously uninsured, while improving access, financial protection, equity, and achieving a 70 % public satisfaction rate.

Abstract

This paper examines the performance of Taiwan’s National Health Insurance (NHI), a universal health insurance program, implemented in 1995, that covers comprehensive services. The authors address two key questions: Did the NHI cause Taiwanese health spending to escalate to an “unaffordable” level? What are the benefits of the NHI? They find that Taiwan’s single-payer NHI system enabled Taiwan to manage health spending inflation and that the resulting savings largely offset the incremental cost of covering the previously uninsured. Under the NHI, the Taiwanese have more equal access to health care, greater financial risk protection, and equity in health care financing. The NHI consistently receives a 70 percent public satisfaction rate.