Should Switzerland abolish its obligatory health insurance scheme?
In view of soaring healthcare premiums, some politicians are calling for the scrapping of the obligatory insurance system. But could this actually happen?
Switzerland’s health insurance scheme is quite unique in Europe, as it is not financed by taxes or other public funds, (as is the case in the EU), but rather by individuals themselves.
READ ALSO: How is Swiss healthcare system different from the rest of Europe?
Having a basic insurance (KVG in German and LaMal in French and Italian) is obligatory, which means all residents of Switzerland, (with very few exceptions) are required to have health coverage.
In terms of accessibility to healthcare, as well as the quality and variety of services covered by KVG / LaMal, this system is very efficient.
However, it is also very expensive, with spiraling costs reflected in the continually increasing health insurance premiums.
This year, they rose by 6.6 percent on average —and more in some cantons — and further hikes are on the horizon for 2024 (exact rates will be published in October).
As a result of this upward trend, and the financial burden the higher costs are putting on many households, there have been many calls from political circles and health experts to reform the current system (read more about this below).
One of them even calls for the scrapping of obligatory health insurance altogether.
‘Failed system’
“The usefulness of this system is questionable,” Zurich Health Minister Natalie Rickli said in an interview with Tages Anzeiger this week.
“This system failed from the financial point of view,” she noted, adding that “continuing to just patch up the existing scheme with many small reforms”, is counter-productive.
Therefore, “we should consider the abolition of compulsory health insurance”.
She also pointed out that this move is “an urgent necessity, as the existing health insurance legislation is outdated".
Rickli added: "A system that plunges a large part of the middle class into financial difficulties can no longer be sustainable."
Rickli is not the only elected official calling for this drastic measure.
For instance, Geneva MP Jean-Marc Guinchard agrees that a major overhaul is needed.
“This complex system imposes premium increases on households year after year, the volume of which becomes unbearable,” he said.
Lots of it is needed to pay health insurance premiums. Image by myshoun from Pixabay
Why does Switzerland have a compulsory health insurance anyway?
Historically, health insurance had been provided by many small private insurers, but it was not compulsory. Those who did not take out a policy paid for medical care out of their own pockets, which was far more affordable in those days than it is now.
In the early 1990s, the government proposed to introduce the Federal Health Insurance Law (KVG / LaMal), which would make health insurance compulsory for everyone — a move seen as a more egalitarian and solidarity system.
READ ALSO: How the Swiss health insurance system is based on solidarity
The proposal was passed by Parliament in March 1994 and accepted by Swiss voters in a referendum in August of the same year.
The legislation went into effect in 1996.
What do experts say about Rickli’s radical proposal?
“If the compulsory health insurance is abolished, [healthcare] will probably cost more for everyone,” according to health economist Willy Oggier.
“What would happen to someone who has no money for treatment — do we let this person die? From this point of view, the proposal is highly problematic.”
While most political parties agree that a reform of the healthcare system is urgently needed, other options are on the table as well.
For instance, the left-wing Social Democratic Party is calling for a new system that would scrap multiple private carriers in favour of just one public insurance provider: the government.
And the Consumer Federation of French-Speaking Switzerland (FRC) is demanding that the government freezes the premiums to stop them from rising next year.
Could the current system of obligatory insurance be abolished?
As this scheme is enshrined in law, any change would have to be decided by Swiss voters in a referendum.
At this point, it is difficult to predict the outcome of such a vote.
But based on a referendum in 2014 to scrap the present private system in favour of the public option, the success of this measure doesn’t seem guaranteed.
At that time, 62 percent of voters said ‘no’ to the plan; seven years prior, in 2007, 71 percent rejected similar reforms.
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Switzerland’s health insurance scheme is quite unique in Europe, as it is not financed by taxes or other public funds, (as is the case in the EU), but rather by individuals themselves.
READ ALSO: How is Swiss healthcare system different from the rest of Europe?
Having a basic insurance (KVG in German and LaMal in French and Italian) is obligatory, which means all residents of Switzerland, (with very few exceptions) are required to have health coverage.
In terms of accessibility to healthcare, as well as the quality and variety of services covered by KVG / LaMal, this system is very efficient.
However, it is also very expensive, with spiraling costs reflected in the continually increasing health insurance premiums.
This year, they rose by 6.6 percent on average —and more in some cantons — and further hikes are on the horizon for 2024 (exact rates will be published in October).
As a result of this upward trend, and the financial burden the higher costs are putting on many households, there have been many calls from political circles and health experts to reform the current system (read more about this below).
One of them even calls for the scrapping of obligatory health insurance altogether.
‘Failed system’
“The usefulness of this system is questionable,” Zurich Health Minister Natalie Rickli said in an interview with Tages Anzeiger this week.
“This system failed from the financial point of view,” she noted, adding that “continuing to just patch up the existing scheme with many small reforms”, is counter-productive.
Therefore, “we should consider the abolition of compulsory health insurance”.
She also pointed out that this move is “an urgent necessity, as the existing health insurance legislation is outdated".
Rickli added: "A system that plunges a large part of the middle class into financial difficulties can no longer be sustainable."
Rickli is not the only elected official calling for this drastic measure.
For instance, Geneva MP Jean-Marc Guinchard agrees that a major overhaul is needed.
“This complex system imposes premium increases on households year after year, the volume of which becomes unbearable,” he said.
Why does Switzerland have a compulsory health insurance anyway?
Historically, health insurance had been provided by many small private insurers, but it was not compulsory. Those who did not take out a policy paid for medical care out of their own pockets, which was far more affordable in those days than it is now.
In the early 1990s, the government proposed to introduce the Federal Health Insurance Law (KVG / LaMal), which would make health insurance compulsory for everyone — a move seen as a more egalitarian and solidarity system.
READ ALSO: How the Swiss health insurance system is based on solidarity
The proposal was passed by Parliament in March 1994 and accepted by Swiss voters in a referendum in August of the same year.
The legislation went into effect in 1996.
What do experts say about Rickli’s radical proposal?
“If the compulsory health insurance is abolished, [healthcare] will probably cost more for everyone,” according to health economist Willy Oggier.
“What would happen to someone who has no money for treatment — do we let this person die? From this point of view, the proposal is highly problematic.”
While most political parties agree that a reform of the healthcare system is urgently needed, other options are on the table as well.
For instance, the left-wing Social Democratic Party is calling for a new system that would scrap multiple private carriers in favour of just one public insurance provider: the government.
And the Consumer Federation of French-Speaking Switzerland (FRC) is demanding that the government freezes the premiums to stop them from rising next year.
Could the current system of obligatory insurance be abolished?
As this scheme is enshrined in law, any change would have to be decided by Swiss voters in a referendum.
At this point, it is difficult to predict the outcome of such a vote.
But based on a referendum in 2014 to scrap the present private system in favour of the public option, the success of this measure doesn’t seem guaranteed.
At that time, 62 percent of voters said ‘no’ to the plan; seven years prior, in 2007, 71 percent rejected similar reforms.
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