Dinner & Dessert at Davos: Health Insurance
American leaders are having dinner and dessert in Davos at the World Economic Forum Annual Meeting. For those who are interested in health insurance, here’s what they might learn from their Swiss dinner companions:
How do the Swiss and American systems differ? They differ in two big ways. In Switzerland, health insurance is compulsory; the U.S. does not require everyone to be covered. Switzerland also has one system for all; the U.S. has different systems for the elderly, poor, employed, and others.
How does it work? The Swiss buy basic coverage online through a government “shopping” site, where they can choose from private carriers and health plans that meet their personal needs and budgets. Much like in the U.S., the country’s annual enrollment period is in November.
How much does it cost? The Swiss spend a lot less than Americans. 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.
How do they pay for it? First, the Swiss pay state and federal taxes. Second, they pay a monthly premium set by the insurance carriers. For monthly basic coverage, a young adult might pay $300 and a family of four might pay $800. Individuals also pay a 10 percent “franchise” (coinsurance) for services.
What services are covered? Basic coverage, which is defined by law, is like Medicaid in the U.S. It includes doctor visits, emergency services, hospitalization (semi-private room), maternity care, mental health, and prescription drugs. Carriers have to offer basic coverage at no profit to everyone.
What about supplemental coverage? One third of the Swiss buy a supplemental plan for services such as a private hospital room or broader provider network. Carriers can refuse to sell new coverage to an individual or exclude a pre-existing condition; premiums also include profit.
How are children covered? Parents cover their children until the age of 25. They can choose different carriers and plans or take advantage of a “family plan.” Like cell phone coverage, a family enrolled in the same plan might benefit from up to a 30 percent reduction in premium.
What about insurance carriers? Individuals buy coverage from private health insurers, which are regulated by the government. For example, residents of the Davos neighborhood of Platz (7270) choose from more than a dozen carriers that compete on price, network, product, and service.
What else?
- Disabled, elderly and low-income individuals may qualify for subsidies.
- Most doctors and hospitals are considered private, while others may be public (e.g., university).
- The government’s website (priminfo.ch) is easy to use even in a foreign language!
Every health insurance program has rules. If you want to learn more about the Swiss health insurance system, watch our video and check out our one-minute calculator at https://clarefolio.com/swiss-calc/.
Sources: 1) Commonwealth Fund: International Health Policy; 2) OECD; http://apps.who.int. ; 3) www.priminfo.ch