Universal Health Care: Mastering Health Insurance in Switzerland

The New York Times featured Switzerland as one of the eight countries in its article “The Best Health Care System in the World: Which One Would You Pick?” (September 18, 2017). If we read the results correctly, Switzerland won. While in Geneva for the Simmons Leadership Conference, here’s what we learned about the system from the locals.

Why is it universal? Health insurance is compulsory for all Swiss citizens, which means that everyone is required by law (Federal Health Insurance Law of 1996) to buy it. Switzerland also has one health insurance system for all. It does not have separate systems for the elderly, poor and disabled, such as Medicare and Medicaid, like in the U.S.

How does it work? Individuals buy basic and supplemental coverage directly from health insurance carriers in the private market. Carriers are required by law to provide basic coverage to everyone, but they can refuse to sell supplemental coverage to an individual or exclude a pre-existing condition. They compete with each other on price, network and service, and it’s easy to shop for coverage online.

What is covered? Basic coverage, which is defined by law, includes doctors’ office visits, emergency services, maternity care, mental health, physical therapy, prescription drugs and inpatient hospitalization. About a third of the population also buys a supplemental plan for services not covered by basic coverage, such as a private hospital room, broader provider network and dental and vision care.

What about children? Children are covered by their parents up until the age of 25. Their basic coverage is not subject to deductibles to improve access to care. One working mother shared that she also purchases supplemental coverage for her young adult children because carriers can exclude individuals who haven’t always had it. “Once they turn 25, they can make their own choices,” she said.

How much does it cost? In addition to general taxation at the municipal, cantonal and federal levels, individuals pay premium. It varies by carrier as well as by features such as deductible, coinsurance and out-of-pocket maximum. A family of four might pay $800 per month for basic coverage and another $800 for supplemental coverage; subsidies are available for low-income individuals.

How does it compare? Switzerland spends less than the U.S., but more than other European countries. In 2015, total expenditure on health per capita was $7,536 in Switzerland and $9,507 in the U.S. The percentage of GDP on health was 12.1 percent and 16.9 percent, respectively. Costs are also increasing. “My income is fixed, and my health insurance uses more of it every year,” complained one retiree.

What else? Most doctors and some hospitals are considered private, but others—like those affiliated with a state university—are public. Employers are involved only if they choose to provide supplemental coverage for their employees. While things like basic benefits and carrier behavior are government regulated, the system is also highly competitive among private insurers for individual customers.

When the Swiss talk health care at a dinner party—which they do—everyone at the table is talking about the same system. Nor are they in one system one day and another the next. The Swiss at our table were informed consumers of their health care in terms of the purchases they make, the money they spend and the quality they demand. In other words, they are Mastering Health Insurance.

Sources: 1) Commonwealth Fund: International Health Policy; 2) OECD; 3) http://apps.who.int