Initiative launched to cap health insurance premiums

Ahead of parliamentary elections, the Social Democrats propose a maximum limit on health insurance costs. © Keystone / Gaetan Bally

Many Swiss households are struggling to cope with rising health insurance premiums. A people’s initiative wants premiums to not exceed 10% of income with the balance paid for by the state.

Called “10% of a household’s income for health insurance premiums is enough” (Premium Relief InitiativeExternal link), the text launched on Tuesday by the Social Democratic Party joins a long list of initiatives launched to manage the steady rise in health care costs and the accompanying rise in compulsory health insurance premiums. This increase is continuing at a rate significantly higher than that of wages, which is putting large segments of the Swiss population in difficulty.

The aim is to include in the Swiss constitution a premium limit of 10% of disposable income and the right to a subsidy for those whose premiums exceed this limit. The initiative foresees that at least two thirds of this reduction would be financed by the federal government and the rest by the cantons.

The party now has 18 months to collect the necessary at least 100,000 signatures to force a nationwide vote for its proposal which is also considered a suitable campaign tool ahead of October’s parliamentary elections.

Minimise differences

The Social Democrats’ idea is to provide relief to the low- and middle-income sections of the population and to distribute the financing of premium reductions more equitably between the cantons. The goal is also to bring some harmonisation in a system that is currently characterised by huge differences between the 26 cantons, both in terms of the premiums paid by policyholders and in terms subsidies.

In Switzerland, health insurance premiums are tailored to the individual, independent of income and vary according to age group, health insurance provider and place of residence. Insured persons can cut costs by opting for a higher deductible or by accepting restrictions like choosing from a limited pool of doctors. The poorest section of the population is entitled to a premium reduction that is subsidised by the state and fixed by the canton.

According to the 2016 figures (the latest available), the average health insurance premium was CHF3,993 (around $3,993) per year for an adult and CHF1,039 for a child. But the differences from one family or individual to another can be enormous. In fact, more and more people are simply no longer able to pay the bill and get into debt. According to an estimate by the Federal Health Office, in 2016, nearly CHF843 million in premiums remained unpaid.

Costly cure

In addition to these high premiums, there are also the amounts that policyholders have to pay out of their own pockets. In 2016, out of almost CHF80.5 billion in health care costs, households paid more than CHF23.2 billion directly in the form of deductibles and contributions.

An international comparison by the Organisation for Economic Cooperation and Development (OECD) clearly shows how much these costs weigh on the Swiss household budget.