Swiss Federal Council Announces Measures to Combat rising Health Insurance Premiums

Bern, Switzerland – The Swiss Federal Council unveiled a series of measures on Wednesday, November 8, 2023, aimed at curbing the continuous increase in health insurance premiums. These steps, effective January 1, 2024, include adjustments to the cost-sharing mechanisms and increased openness requirements for insurance companies.

The core of the new regulations focuses on raising the mandatory deductible (franchise) to CHF 300, with options for higher deductibles of CHF 500, CHF 700, CHF 1000, CHF 1500, and CHF 2500. Currently, the minimum deductible is CHF 300. The Federal Council anticipates this will incentivize policyholders to be more mindful of healthcare consumption and potentially lower overall costs. Individuals choosing higher deductibles will see corresponding reductions in their monthly premiums.

Furthermore, the government is introducing a cap on out-of-pocket expenses, limiting the total amount individuals will have to pay annually for healthcare to CHF 700 for adults and CHF 350 for children. This measure aims to protect vulnerable populations from catastrophic healthcare costs. The previous system lacked a uniform cap, leaving some individuals facing substantial financial burdens.

A key component of the new policy is increased transparency. Insurance companies will be required to provide detailed breakdowns of their administrative costs and profit margins, allowing for greater scrutiny and accountability. The Federal Office of Public Health (FOPH) will be responsible for overseeing this increased transparency and ensuring compliance. The FOPH, headquartered in Bern, will publish annual reports detailing the findings.

The Federal Council also announced plans to explore alternative insurance models, including the possibility of supplementary insurance options with different levels of coverage and cost-sharing. A working group, comprised of representatives from insurance companies, patient advocacy groups, and the FOPH, will be established to investigate these options and present recommendations by June 30, 2024.

Context: The Swiss Healthcare System and Premium Increases

Switzerland operates a universal healthcare system based on mandatory health insurance. All residents are required to have basic health insurance coverage,provided by a range of private,non-profit insurers. The system is financed through a combination of premiums paid by individuals,contributions from employers,and subsidies from the cantons (Swiss states).

Health insurance premiums in Switzerland have been steadily rising for years, outpacing wage growth and becoming a notable financial burden for many households. In 2023, the average monthly premium for adults is approximately CHF 330 (approximately $375 USD), with significant variations depending on the canton, insurance plan, and deductible chosen. Cantons like Uri and Schwyz generally have lower premiums, while those like Geneva and Basel-Stadt tend to be higher.

Several factors contribute to these rising costs, including an aging population, advancements in medical technology, increasing demand for healthcare services, and administrative overhead. The Swiss healthcare system is known for its high quality of care but also for its complexity and relatively high costs compared to other developed nations.

Previous attempts to control premium increases have included measures to promote competition among insurers, negotiate drug prices, and encourage preventative care. However, these efforts have had limited success in stemming the tide of rising costs. The current measures represent a more comprehensive approach, addressing both cost-sharing and transparency issues.

The Federal council’s decision follows extensive consultations with stakeholders, including insurance companies, healthcare providers, patient organizations, and cantonal governments.The proposals were subject to a public consultation period, during which feedback was gathered and incorporated into the final