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HEALTH INSURANCE

Why Swiss health premiums are set to rise — and what you can do about it

Health insurance is a constant topic of discussion— and worry — in Switzerland. Unfortunately, premiums look set to rise significantly in 2023.

Why Swiss health premiums are set to rise — and what you can do about it
Going to a doctor is never fun but good health insurance helps. Photo by Pixabay

Premiums for compulsory health insurance will rise by an average of 5 percent in the fall, according to online price comparison site, Comparis.ch.

And many people could even see their premiums soar by more than 10 percent in 2023 — the sharpest hike in premiums in 20 years.

One of the reasons for the drastic increase of the already expensive premiums are lower cash reserves held by insurance carriers. 

Here’s what you need to know. 

READ MORE: ‘Worrying’: Swiss health insurers warn of significant price increases

What is a reserve and why is it important?

A ‘reserve’ is a sum of money that insurers are obligated to set aside to fulfil the policyholders’ claims. This is strictly regulated by the Federal Office of Public Health (FOPH).

According to Comparis, in 2021, “the reserves held by health insurers amounted to 12.4 billion francs, with the annual premium volume totalling some 34 billion francs”.

However, in the summer of that year, the Federal Council introduced a range of measures to actively encourage insurers to reduce their reserves, resulting in the announced hike in premiums.

“This happens because, once the reserves are used up after they have been reduced, premiums must be raised in order to compensate for increased costs during the period of reserve reduction. In other words, if reserves are reduced too quickly, premiums could rise sharply again”, Comparis explains.

However, the need for such a premium hike could have been avoided had there not been political intervention in the management of the reserves, Comparis said.

The government “has forced the health insurance companies to reduce their reserves. This is why many of them now lack the necessary financial cushion to absorb current cost fluctuations”, according to Felix Schneuwly, Comparis’ health insurance expert.

“Last year the Federal Council increased the pressure on insurers to draw on their reserves, even though an exceptional increase in costs was looming”, he added. “As a result, many funds have reduced their reserves excessively by setting premiums well below costs”.

The “exceptional increase” that Schneuwly referred to was the reason why health care costs skyrocketed in the first place: a significant rise in medical costs incurred during the two years of coronavirus pandemic, estimated to cost insurers one billion francs so far, not even taking into account about 265 million spent for Covid vaccinations in 2021.

On the whole, Santésuisse,  an umbrella organisation for health insurance companies, estimated that the pandemic cost Swiss insurers 1 billion francs so far. 

Drug prices are also an issue in Switzerland, where patients often pay much more than their counterparts in neighbouring European countries.

READ MORE: EXPLAINED: Why Swiss healthcare costs are rising and how you can save

When will you be notified of your premiums for 2023?

By law, you must receive a letter from your insurance company, notifying you of the premium for the following year, no later than October 31st.

If you then decide to cancel your current plan and switch to a cheaper one, you must notify your carrier, by registered post, by November 30th at the latest.

What cheaper insurance policies are there?

There are a number of ‘low-cost’ options for basic insurance, including the HMO, Telmed and bonus insurance programs.

With the HMO (Health Maintenance Organisation) model, you are not free to choose your doctor or hospital. Instead, your first point of contact will be with a doctor from an HMO, or group practice, who will coordinate your treatment. In exchange, you get a cheaper premium.

You can also take out a Telmed policy, where (in most cases) you receive medical advice in a first consultation over the phone before a referral to a doctor or hospital.

Some providers also offer a bonus insurance program where you start with a higher premium which then drops for every year that you do not submit an invoice to your provider.

This link provides more information about how you can save on health insurance premiums:

Five tips for getting cheaper health insurance in Switzerland

Good news, if there is any to be had, is that supplemental health insurance is not set to increase.

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For members

HEALTH

Why Swiss patients pay too much for healthcare

Switzerland is an expensive place to live - and that includes healthcare costs. But a new report has revealed how doctors and hospitals are overcharging their patients on a regular basis.

Why Swiss patients pay too much for healthcare

Some doctors and hospitals in Switzerland overcharge their patients by either invoicing services that have not been provided or billing more than is necessary.

This practice is a problem particularly as health insurance premiums are expected to increase significantly in 2023 to reflect rising health care costs.

READ MORE: Why Swiss health premiums are set to rise — and what you can do about it

Swiss health insurers have confirmed that patients in Switzerland are charged three billion more than they should be each year by doctors and hospitals. 

Without these additional charges, healthcare premiums in Switzerland could be ten percent cheaper, estimate the country’s healthcare insurers. 

However, in order to do so, the system would need significant changes to ensure greater transparency. 

Cost gouging hard to prove

Matthias Müller, spokesperson for health insurance umbrella organisation Santésuisse, confirmed that certain doctors charge too much.

“We see this problem particularly in the outpatient care, where doctors can choose from numerous tariff positions”.

However, proving excessive charges is difficult, according to Felix Schneuwly, a health industry expert at Comparis price comparison service.

That’s because “patients do not sign a ‘work report’ for the medical services rendered”, so health insurance companies cannot check whether a service was provided at all and whether it was indeed necessary, Schneuwly said, explaining that an insurance company can only verify whether the quantities and costs of the services on the invoices comply with the law.

Patients also have very little power to prove that they have been overcharged, which effectively gives doctors and hospitals the freedom to charge more. 

Yvonne Gilli, of the Professional Association of Swiss Doctors (FMH) said that while they could not confirm whether these allegations were accurate, she was aware of instances where doctors had charged too much, although she reaffirmed that this “did not happen often”. 

FMH said there were 58 cases of overcharging in Switzerland in 2019, the last year before the pandemic, but that “Every doctor convicted in this regard is one too many”.

Schneuwly said hospitals and doctors should be required to produce “treatment reports” which would allow insurers to compare costs and the treatment provided. 

“(That way) the insurance companies can understand exactly which service was provided and for what reason.”

Müller notes that the same procedure can cost up to three times as much in different parts of the country and at different practices. 

As patients do not pay these costs directly they are less likely to question them, although they eventually pay more through their healthcare premiums.

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