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HEALTH INSURANCE

EXPLAINED: Why Swiss healthcare costs are rising and how you can save

After premiums on Switzerland’s compulsory health insurance fell last year, new increases are expected in 2023. There are, however, some ways to cut your costs.

EXPLAINED: Why Swiss healthcare costs are rising and how you can save
Will his vet bills go up as much as your health insurance premiums? Photo by Pixabay

Swiss health insurance organisation Santésuisse has recently warned of a “worrying” increase in 2023 of the already expensive health insurance premiums.

They could go up as much as 10 percent over the current rates — the sharpest hike in premiums in 20 years.

READ MORE: ‘Worrying’: Swiss health insurers warn of significant price increases

The reason are higher medical costs incurred during the two years of coronavirus pandemic, estimated to cost insurers one billion francs so far, not even taking into account about 265 million spent for Covid vaccinations in 2021.

Santésuisse and MPs are now calling for measures to stop costs from soaring further.

“If you do nothing, there is a risk of double-digit premium increases”, Santésuisse’s director Verena Nold said in an interview on Friday.

On the political front, the initiative launched by the Centre / Mitte party demands that the Federal Council and the cantons intervene if healthcare costs rise sharply in relation to wages.

A similar initiative by the Social Democratic party wants a ruling that no household has to spend more than 10 percent of its disposable income on premiums.

Santésuisse is also urging the government to implement a range of reforms to reduce costs and ensure that not so many are passed on to consumers. 

One is to establish a system which rewards efficiency and cost-effectiveness in service delivery, encouraging doctors, hospitals and pharmacies to be more expedient. 

“We could also, for example, lower the laboratory prices, as we pay up to three times as much as abroad”, Nold said, adding that a reduction in drug prices to European levels is also an option.

“With regular comparisons of drug prices and an adjustment to the price level in European comparison countries, taking into account all discounts, a large savings potential could be exploited”, Santésuisse said.

While the insurance industry and politicians are debating cost-cutting measures, what steps can individuals take to lower their healthcare premiums?

As outlined in our article from November 2020, there are several ways to lower the cost of premiums, even if slightly:

Health maintenance organisation (HMO)

Under this model, policyholders are required to consult a particular HMO practice. Two disadvantages of this alternative is a limited choice of doctors and you also need a referral to see a specialist.

However, the benefit is a premium reduction of up to 25 percent compared to the conventional insurance.

Family doctor model

Your family doctor, a general practitioner, will be designated by your insurance company and will be in charge of all your medical treatment.

He or she will refer you to a specialist if necessary. 

If you opt for this option, you could save 20 percent on your insurance.

READ MORE: Five tips for getting cheaper health insurance in Switzerland

The Telmed alternative

If you choose this option, you have to call a telephone service and get a referral to a doctor or hospital.

This does not apply to medical emergencies and other exceptions, such as eye exams and annual gynaecological check-ups.

Total savings could range between 15 and 20 percent. 

For both HMO and Telmed you can calculate your premiums here

Increase your deductible

In Switzerland, the deductible (franchise) ranges from 300 to 2,500 francs.

The lower your deductible, the higher your premiums, and vice-versa.

If you are young, healthy, hardly ever get ill, and don’t take any expensive medications, then you can save substantially with the highest franchise.

Keep in mind, however, that if you choose the highest deductible and end up needing medical care, you will have to pay a greater proportion of the costs.

Pay the premiums in one lump sum

Most insurance carriers will give you a 2-percent reduction if you pay your premiums upfront rather than on monthly basis.

If you want to want to cancel your current insurance and switch to a cheaper one — your carrier must notify you of the new rates by October 31st — you have to do so by registered letter before November 30th.

READ MORE: EXPLAINED: How to change your health insurance carrier in Switzerland and save money

What if you want to really save on premiums and don’t take out an insurance policy at all?

Nice try, but no.

Even if you are healthy, you still need to have basic health coverage, called KVG in German and LaMal in French and Italian .

If you don’t purchase a policy within three months of your arrival in Switzerland, authorities will send you a letter reminding you of your obligation to do so.

If you still refuse, your canton will purchase insurance for you and send you a bill — which you will have to pay.

Also, several cantons — Aargau, Lucerne, Ticino, Thurgau, and Zug — keep blacklists of people who don’t pay their health insurance premiums. The delinquent payers can be treated for emergencies, but the insurance will not cover their other medical bills. 

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COST OF LIVING

One in 10 struggle to make ends meet: Poverty in Switzerland revealed

Switzerland is one of the wealthiest countries in the world which contributes to overall high satisfaction, but many people still have financial worries.

One in 10 struggle to make ends meet: Poverty in Switzerland revealed

People in Switzerland have the highest level of life satisfaction in Europe, according to a study published his week by the Federal Statistical Office (FSO).

However, that doesn’t mean that everyone in the Alpine nation is satisfied with their quality of life. 

According to the FSO, who carried out the survey on income, poverty and living conditions in 2022, almost one in 10 people in Switzerland struggled to make ends meet financially, and nearly 5 percent of the population had to do without important goods, services and social activities due to financial reasons.

The poverty rate in Switzerland was measured as 8.2 percent. 

READ ALSO: The Swiss cantons with the highest (and lowest) incomes

How satisfied are people in Switzerland?

On a scale of 0 to 10, the mean score for satisfaction with current lifestyle in Switzerland was 8, compared to 7.9 in Austria, 7.2 in Italy, 7.0 in France and 6.5 in Germany. In Switzerland, life satisfaction has hardly changed since 2014 and increases with age, level of education and income.

The population is particularly satisfied in interpersonal areas such as living together, the working atmosphere and personal relationships. More than half of people aged 16 and over were very satisfied in these areas in 2022 (scores of 9 or 10). In contrast, only one in three people were very satisfied with their leisure time or personal financial situation.

A person works on a laptop.

People were generally happy with work in Switzerland. Image by StartupStockPhotos from Pixabay

The FSO measured the general standard of living on the basis of the median available disposable income, whereby the price level differences between the countries were corrected. In Switzerland, disposable income is 2.5 times as high as in Greece, 1.5 times as high as in Italy, 1.3 times as high as in France, 1.2 times as high as in Germany and 1.1 times as high as in Austria.

The FSO said: “Despite the high price level in Switzerland, the population’s standard of living is therefore higher than in neighbouring countries and the majority of EU countries.”

But there are stark differences between living conditions in Switzerland, a country of around 9 million people. 

In 2022, 9.9 percent of Swiss residents had difficulty making ends meet at the end of the month and 4.9 percent of the population were affected by material and social deprivation, according to the survey. This means that they had to do without important goods, services and social activities such as new clothes, regular leisure activities or meetings with friends for financial reasons, were unable to pay their bills on time or couldn’t pay for unexpected expenses.

As you would expect, those struggling to make ends meet have a significantly lower level of life satisfaction. In 2022, only one in nine of those facing financial issues were satisfied with their lives (10.9 percent vs. 37.9 percent of the total population). This group also stated that they felt discouraged or depressed most or all of the time (24.3 percent vs. 5.4 percent of the total population) and were less likely to be happy most or all of the time (37.1 percent vs. 76.6 percent of the total population).

How many people in Switzerland are in poverty?

In Switzerland, 8.2 percent of the population had low levels of income in 2022 – this corresponds to around 702,000 people. The poverty rate was therefore lower than in the previous year (8.7 percent), but the difference is not statistically significant, researchers said.

Furthermore, the price increases for electricity, heating costs and consumer goods since 2022 are not yet reflected in these figures. Although Switzerland has been shielded from severe inflation hikes seen elsewhere in Europe in the wake of Russia’s war on Ukraine, consumer prices have still gone up.

As in previous years, foreign nationals, people in single-parent households, people without further education and those in families or households where there are high levels of unemployment are frequently affected by income poverty. At 3.8 percent (144,000 people), the poverty rate among the working population was also slightly lower than in the previous year (4.2 percent), but again, researchers said that this development is not viewed as significant. 

In a previous study by the statistical office, the parts of Switzerland with the lowest incomes were found to be the cantons of Jura, Valais, and Ticino.

READ ALSO: Where are the poorest parts of Switzerland?

The poverty threshold comes from the guidelines of the Swiss Conference on Social Welfare (SKOS). In 2022 this amounted to an average of CHF 2,284 per month for an individual and CHF 4,010 per month for a family.

This income threshold is higher in Switzerland than elsewhere, but the cost of living is higher as well. 

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