Why is Swiss health insurance set to get more expensive?

Swiss consumers were hit with a substantial increase in premiums of the obligatory health insurance  — KVG in German and LaMal in French and Italian — at the beginning of this year: 6.6 percent on average, though in some cantons they rose even more.

For instance, the highest, above-national-average premiums hit Neuchâtel (+9.5 percent), Appenzell Innerrhoden (9.3 percent), and Ticino (9.2 percent).

Residents of Zurich saw their premiums climb by 7 percent.

The hope was that premiums would not go up again in 2024, but this is likely to happen nevertheless.

In fact, not only are they set to increase again, but they may also be significantly more expensive in 2024: the latest figures for January and February already show a 7.5-increase in costs per insured person.

Although the period evaluated is short, Verena Nold, head of Santésuisse, the umbrella group for health insurance companies, warned that if the government does nothing about the costs, "our health system will go straight into the wall".

One of the reasons the Federal Office of Public Health cited for this year’s hike was that the pandemic made estimating healthcare costs “particularly difficult. It now appears that the premiums paid during the years 2021 and 2022 proved insufficient to cover the costs, so a catch-up is essential in 2023".

Now that the government doesn’t have to spend as much on Covid, what are the reasons for further premium increases?

There are several factors, experts say:

Longevity

People in Switzerland have a high life expectancy, which means they are using medical services and facilities longer.

In fact, the Swiss have the world’s second-longest life expectancy (83.45 years), only surpassed by Japan’s 84.26 years average.

READ ALSO : How long can you expect to live in good health in Switzerland?

This is a positive development, of course, but it also means that as people get older, they tend to suffer from chronic, cost-intensive diseases.

While there is nothing to be done about longevity-incurred costs, most over-spending (and consequently, higher costs insurance carriers have to pay) is due to mismanagement, according to Tobias Müller, a healthcare researcher at Bern University of Applied Sciences.

Overcharging for outpatient services

As Müller told Blick newspaper on Tuesday, doctors and hospitals can bill health insurers for any additional services they choose to provide  — whether actually needed or not.

"So it should come as no surprise that unnecessary services are provided," he pointed out.

These kinds of treatments include things like a vitamin D blood test — which checks a patient’s risk of osteoporosis or other bone problems — and even surgeries that are not medically necessary, Müller said.

Obsolete procedures

While Switzerland prides itself on its high-tech medical technology, some procedures that are still routinely done — and paid for by health insurance — have long been considered outdated abroad.

For instance, "there has been evidence for 20 years that a knee arthroscopy is not beneficial,” Müller said.

Yet in Switzerland, it is one of the most common surgical procedures, contributing to the unnecessary healthcare costs, he added.

More expensive medications

In Switzerland, only 22 percent of all drugs are generics, while in Germany the rate is 83 percent, data shows. 

Santésuisse estimates that the potential annual savings would be 200 million francs if generics were systematically used instead of the brand-name products.

But even generics are more expensive in Switzerland than elsewhere in Europe:

READ ALSO: Generic medication twice as expensive in Switzerland as EU

More expensive tests and procedures

As an example of higher-than-elsewhere medical costs, Müller cites blood tests, which cost about 17 francs in Switzerland and 1 euro in Germany.

So how much more can you expect to pay for your health insurance in 2024?

The exact amounts for each canton will be released by October 31st.