Switzerland’s Federal Council announced plans to reduce the discounts offered to those willing to risk paying the first chunk of their annual medical bills. It also plans to adjust deductibles in line with shifts in medical costs. This will be discussed until 19 October 2017.
Switzerland’s compulsory basic health insurance can be bought from a range of private insurance companies, however these companies must work within rules set by the government, who set both the size of the deductibles and the maximum level of discount that can be offered – the deductible is the annual amount you need to cover out of your own pocket before the insurance company starts paying.
For adults and young adults everyone has a minimum annual deductible of CHF 300. Those who want to bet they won’t need the doctor can select a higher deductible of CHF 500, CHF 1,000, CHF 1,500, CHF 2,000 or CHF 2,500. In return these people get a discount. The insurer decides what it is but cannot offer more than government-set maximums. Currently the maximum discounts are 70% of the difference between the individual’s chosen deductible minus the compulsory deductible of CHF 300.
Currently, someone choosing the largest deductible of CHF 2,500 could expect a discount of up to CHF 1,540 a year ((2,500 – 300) x 70%).
Some view this as a reward for healthy living. If you keep an eye on your health it reduces the risk you’ll need the doctor and makes a high deductible a better bet.
The government has decided to reduce the maximum annual discount for the largest deductible from CHF 1,540 to CHF 1,100 ((2,500 – 300) x 50%). Those opting for the CHF 1,500 and CHF 2,000 deductibles should also brace their pockets for a hit. The maximum saving from a CHF 2,000 deductible is set to fall from CHF 1,190 to CHF 935, and from CHF 840 to CHF 720 for the CHF 1,500 deductible.
One concern the Swiss health authorities have is people choosing high deductibles then avoiding important medical care. They think this risk is highest for those on low incomes, especially those who choose the highest deductibles because can’t afford a policy with a lower one.
The government has been progressively chipping away at these discounts. Before 2000, the maximum discount was equal to 100% of the deductible. In 2000 it was cut to 80%. Then it was cut again in 2005 to 70%. It is now set to drop to 50% for the highest deductible. There will be a sliding scale of 80% for 500, 70% for 1,000, 60% for 1,500, 55% for 2,000 and 50% for 2,500.
It is hard to find much logic in this. Those choosing high deductibles will have a greater incentive to avoid the doctor. The deductible will stay the same, and after paying higher premiums they will have even less money to cover the first CHF 2,500. This will hit the very poorest hardest, the group the health authorities are most concerned about. In addition, it will hit those who invest discipline and effort in keeping themselves healthy so that they have a fighting chance of saving money on healthcare.
The only potential upside is a thinly spread increase in health care funding, which will be felt by hardly anyone.
Perhaps one day those opting for healthier lifestyles will be able to claw back some of the lost ground with premium discounts for exercising. A survey in May 2017, revealed that 47% of the population would be happy to be electronically monitored in return for a discount.
Another glimmer of hope for the health conscious might be recent talk of taxes on the foods making people sick. These taxes could be used to pay for medical care, reducing premiums across the board. A sugar tax in Mexico reduced the consumption of unhealthy drinks by 6%. The potential health benefits were even greater for the poorest segment whose consumption of sugary drinks fell 9%.
The World Health Organisation (WHO) reckons non-communicable diseases now account for 63% of deaths globally. These diseases include obesity, heart disease, diabetes and some cancers. According to WHO the main problem foods are free sugar – found in soda, fruit juice, cakes and other processed foods, sodium, and saturated fats – contained mainly in meat, dairy and some vegetable oils.
A study funded by the Gates foundation estimates that 57% of Swiss men over 20 are obese or overweight. The same percentage for Swiss women is lower at 16%.
Another idea might be to offer health premium discounts for non-smokers. It might change behaviour and reduce the overall healthcare burden. The Swiss federal office of public health estimates the annual collective cost of smoking in Switzerland at CHF 5.6 billion.