The Greens believe that the current system is unfair and creates the wrong incentives for insurers. But would a state solution be cheaper?
The Greens believe that a municipal health insurance scheme would lead to better healthcare.
Gaëtan Bally / Keystone
After 130 years, it was over. On June 30, 2018, Daniel Rüegg buried the Turbenthal health insurance company. Not because of a lack of success, on the contrary. The insurance company was popular. It was known as the cheapest health insurance company in Switzerland, Rüegg was the only employee and his own boss.
He was far from able to accommodate everyone who was interested. He therefore limited the offer to insured people from Turbenthal and the surrounding communities of Wila and Wildberg in the Zurich Oberland. There were 400 in total.
What was Rüegg’s downfall: He worked exclusively with index cards and a typewriter for cost reasons. The “Blick” newspaper calculated that in 2018, Swiss people paid 465 francs per month for basic insurance with a 300-franc deductible – with the Turbenthal health insurance company it was only 260.
But the federal government demanded at least partial digitization, for example to be able to send the insured’s data in electronic form to the BAG in Bern. Rüegg told Blick: “If I had bought a computer and the necessary software, I would no longer be able to offer my insured the low premiums they have today.” So, with a heavy heart, he closed his health insurance company.
A monthly premium of just 260 francs – that is practically unthinkable today. Premiums have risen sharply in recent years. This puts pressure on insurance companies. They have to become more efficient and “fight for their customers,” Marcel Thom, head of health insurance at the consulting firm Deloitte, recently told the NZZ.
Can it even exist: a cheap health insurance company? This is a question that is also being asked in the city of Zurich. The Greens have now submitted an explosive proposal to the city parliament: Zurich should examine the introduction of a municipal health insurance company. The competition between the health insurance companies is at the expense of the insured and creates the wrong incentives, criticizes the party. Therefore, a new state offer is needed alongside the private insurance companies.
“Only interested in the highest possible return”
Matthias Probst, who submitted the motion together with Yves Henz, believes that regional or municipal health insurance companies are the right approach – and he welcomes offers such as those in Turbenthal. In his view, however, there should be no more private providers. “They are only interested in the highest possible return, not in the health of the insured.”
This means that older and sick people, as well as people with low incomes, are disadvantaged. “They are not interesting for the health insurance companies.” High premiums could lead to existential hardship.
Probst is also bothered by the fact that health insurance companies invest a lot of money in advertising and marketing without the insured benefiting from it. He believes that things would be different with a municipal health insurance company. Probst sees it as the missing piece of the puzzle in the health care that the city already offers, especially with the city hospital.
After a start-up phase, the insurance should cover costs. A municipal health insurance company can work cost-efficiently with lean structures, offer solid basic care and focus on the health of Zurich residents. For Probst, this also means that the city should offer health checks or sports subscriptions to the general population as a standard measure in the interests of prevention.
And the Greens are thinking even further: in the long term, the municipal insurance company should become part of a “national state health insurance fund” (which does not exist today) and should therefore seek cooperation with other state insurers.
But how sensible is it for the state to become the health insurer? The NZZ asked two renowned health economists about this: Heinz Locher from Bern and Willy Oggier from Zurich. Both stressed that the current health system is not unfair. People with low incomes receive reduced premiums. In addition, the health insurance companies have an obligation to accept them. And anyone who is not satisfied with the services can switch.
Heinz Locher believes that health insurance is not a government responsibility. There have been attempts like this in Switzerland time and again, he says. “They have all failed.”
He says the main problem is the high fixed costs that would also be incurred with a municipal solution. It would have the same expenses for logistics, IT, specialists and invoice control – just not for the CEO. That is why running a health insurance company only becomes profitable if there are around 100,000 insured people. “But even the city of Zurich doesn’t have that many.” In addition, a municipal health insurance company would have to join an association and enter into contracts with hospitals and doctors.
For Locher, it is therefore clear: a municipal health insurance company could not offer cheaper premiums than a private one.
Cheaper premiums hardly possible
Health economist Willy Oggier says the Greens’ idea is well-intentioned but not realistic – for several reasons. Firstly, he sees a conflict of roles. The city of Zurich already operates a city hospital as well as retirement and nursing homes. “If it now also becomes a health insurer, this could lead to distortions in competition with private providers.”
Secondly, health insurance companies must comply with federal law and offer basic insurance for the population. “The list of services is predetermined.” It is not possible to make additional offers at one’s own discretion, as Probst envisages.
And thirdly, Oggier believes that a municipal insurance scheme would be of interest to people who are not attractive to insurance companies. These would incur high costs, which in turn would increase premiums. In the end, the taxpayer would have to pay for these costs. “The system certainly won’t become cheaper this way. A municipal solution would have the opposite effect: it would become more expensive.”
The Greens’ proposal has also not been well received by the conservatives in the city parliament. The FDP rejects it. City councilor Deborah Wettstein says: “The city cannot run a special train in the health system, but must adhere to higher-level laws.”
That’s why it’s hardly possible to offer cheaper insurance. This isn’t a government task anyway, says Wettstein. Zurich residents can already choose from over forty providers. There’s no need for another provider.
The Left Party may sound different. They also rely on state control in the health care system. This was recently shown when the red-green majority in the city parliament rejected the city hospital’s request for a little more entrepreneurial freedom. The city council had wanted to separate the city hospital from the administration. The Left Party rejected this – because they feared less say.
The proposal will now be discussed in the city parliament. If it finds a majority, the city council will have to deal with it.
