Health premium rise is lower than expected

Health insurance premiums have risen 18 per cent in the past three years Keystone Archive

Health insurance premiums in Switzerland will rise by an average of 3.7 per cent next year – less than insurers had anticipated.

The government says the increase will range between 2.3 per cent and 5.3 per cent, depending on age and where the policyholder lives.

Health insurance in Switzerland is mandatory and no one can be denied basic insurance cover.

The hike announced on Tuesday by the Federal Health Office comes in below the 4.3-per cent increase forecast by insurers last week. It is also slightly less than the rise in basic health costs, which have grown 24 per cent in the past five years.

While premiums have grown dramatically in Switzerland – by almost 18 per cent in three years – next year’s increase represents a modest slowdown.

Premiums rose by an average 4.3 per cent in 2004 and 9.6 per cent in 2003.

Unenthusiastic response

The Swiss Patients Association gave a muted response to the relatively modest increase. “It’s neither good nor bad,” said president Margrit Kessler.

But she warned that the increased patient’s excess would have a negative impact on families.

Insurers told swissinfo not to expect a trend towards lower insurance costs.

“We aren’t calling this a trend [towards lower insurance rates] because the cost of health care is continuing to rise,” said Peter Marbert, spokesman for Santésuisse, the umbrella organisation representing health insurance companies.

“The cost of health service provision will increase by five per cent in 2005, so insurance is likely to rise again next year.”

Marbert said insurers didn’t need to raise premiums by as much this year, simply because the hikes of 2003 and 2004 had built up the company reserves to the federally-mandated level.

The more modest increase was “also because of higher deductibles”, he added. “People pay more when they are ill, but they pay less for insurance.”

Interior Minister Pascal Couchepin said an increase in the excess would lead to a drop in demand for health services.

He added that premium increases should be held below four or five per cent, if possible.

Trend

Next year’s increase should help to standardise insurance premiums across the cantons. Geneva, with a relatively high average premium will see a modest increase of 3.2 per cent.

Valais, with one of the lowest average premiums, will be harder hit, with a 4.9-per cent increase.

Policyholders in Zurich face the lowest increase – 2.3 per cent – while those in St Gallen will bear the sharpest hike – 5.3 per cent. But the range is narrower than last year, when premium increases varied from 0.8 to 7.2 per cent across the cantons.

“We have seen a trend in the past two years, where the less expensive regions are imposing higher increases, and the more expensive regions are imposing lower ones,” Marbert said.

Study

In a recent study, the average amount paid for basic compulsory insurance was found to be 36 per cent higher in canton Ticino and large parts of canton Geneva and Vaud than it was in German-speaking eastern and central Switzerland.

The average person in Italian-speaking Ticino pays more than SFr3,000 ($2,380) annually for compulsory coverage.

In the five-year period to 2003, total costs for basic compulsory health insurance rose from SFr14.6 billion to SFr18.2 billion.

The total cost of Switzerland’s health system was SFr48 billion in 2002 (for a population of 7.5 million). The bill is divided among insurers, individuals and the cantons.

swissinfo, Elizabeth Meen

Key facts

Average increases in health insurance premiums:
3.7% in 2005
4.3% in 2004
9.6% in 2003
24% between 1999 and 2003
52% of Swiss have difficulty paying for health insurance.

In brief

Health insurers must announce new premiums by October 31.

If a policyholder wants to change insurers, he has until November 30 to terminate his contract.

To save money, the Federal Health Office suggests changing insurers, accepting a higher excess, or choosing a special model of health insurance.