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HEALTH INSURANCE

Is Swiss health insurance cheaper or even free for pensioners?

In the United States, people over the age of 65 are entitled to government-sponsored Medicare insurance which covers their health costs. Does a similar system exist in Switzerland as well, or must seniors continue to pay for health insurance themselves?

Published: 19 January 2024 12:30 CET
Is Swiss health insurance cheaper or even free for pensioners?
Swiss health insurance rates are not determined by age. Photo by Mockup Graphics on Unsplash

Swiss and American healthcare systems are (literally and figuratively) worlds apart, and not just in terms of insurance costs.

READ ALSO: How does the Swiss healthcare system compare with the US?

The same is also true about the financing of EU health schemes versus Switzerland’s.

One major difference is that, in contrast to its European neighbours, Switzerland’s system is not tax-based or financed by employers, but rather by individuals themselves.

And that principle applies to people of all ages, including pensioners, who must continue to pay for their own health insurance after retirement.

READ ALSO: How is Swiss healthcare system different from the rest of Europe?

So the answer to the question of whether retirees in Switzerland are entitled to free healthcare is ‘no.’

Why is this?

As stated above, Switzerland’s system is different than practically anywhere else.

That’s because under the Swiss Federal Health Insurance Act of 1994, which went into effect in 1996 after being approved by Swiss citizens in a referendum, basic health insurance — KVG in German and LaMal in French and Italian — is compulsory for everyone in Switzerland.

(While there are some specific exceptions to this rule, they don’t include pensioners).

The legislation mandates all residents of Switzerland, regardless of age, to purchase a policy from one of dozens of private carriers approved by the Federal Office of Public Health (FOPH).

The good news (all things considered) is that health insurance rates are not based on age and will therefore not soar the moment you turn 65 (even though, statistically, this age group has comparatively more health problems)

This means that pensioners pay the same premiums as working adults over the age of 25.

Do seniors at least benefit from lower rates?

Again, no.

Premiums are determined by factors such as your canton of residence and the deductible / co-pay amount you choose, but not by your age.

It is true, however, that for many older people who are no longer employed, the continually increasing insurance premiums are a major financial burden.

In such cases help is available, though it is not tied to age but rather to income.

According to the KVG / LaMal law, the cost of insurance should not exceed 8 percent of a family or individual income.

However, according to FOPH’s analysis, policy holders in certain Swiss regions spend much more — between 14 and 27 percent of their earnings — to pay for the premiums.

For those people, subsidies (reductions in healthcare premiums) are available.

Generally speaking, anyone who is a low earner or has a large number of children, could be eligible for subsidised premiums, though criteria, as well as amounts, vary from one canton to another.

Before deciding whether you receive the assistance, however, your canton of residence will look not only at your retirement pension, but at any other financial assets you hold as well.

So if your income is low but you have plenty of money in the bank in the form of savings or other investments, you will not be eligible for this financial aid.

READ ALSO: How does the Swiss pension system work – and how much will I receive?
 

Member comments

  1. Clarification on USA Medicare:
    Medicare is a program that you pay into both during your working years, and, after.
    You become eligible for Medicare when you reach age 65 but it is not free, rather, the monthly cost can be $400-500 per month.
    The primary problem with Medicare is the limitations on what is does and does not cover.
    For those things is does not cover, you are responsible.
    That is a big problem as medical cost in the USA are out-of-control.

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HEALTH INSURANCE

How Switzerland’s two crucial health insurance referendums could impact you

The price of Swiss health insurance premiums has been rising significantly in the past few years, prompting political parties to launch two cost-cutting initiatives. The votes will take place in June and there's a lot at stake.

Published: 24 April 2024 15:33 CEST
Updated: 28 April 2024 08:44 CEST
How Switzerland's two crucial health insurance referendums could impact you

On June 9th, the Swiss will cast their votes on two issues aiming, though in different ways, to curb the continually increasing cost of the obligatory health insurance (KVG / LaMal).

This is what’s at stake.

The ’10-percent’ initiative

In view of the high (and rising) premiums and other costs of living, which eat up a big chunk of the budgets of low- and middle-income consumers, the Social Democratic Party has spearheaded a national vote to cap the insurance rates at 10 percent of income.

Anything over this limit should be paid for by the federal and cantonal government, the party says.

While this strategy may sound enticing to everyone tired of paying high premiums, the government warns that while this proposal looks good on paper, the ‘yes’ vote could unleash some serious consequences.

Its main argument is that this measure would cost several billion francs per year, and does not provide any incentives to control health costs.

Instead, the Federal Council and the parliament have concocted their own ‘counter initiative’ that they want voters to approve.

Under this proposal, cantons will have to increase the amount of financial help they pay toward health premiums for low-income people. 

READ ALSO: How do I apply for health insurance benefits in Switzerland?

‘For Lower Premiums’ initiative

For its part, the Centre party has come up with its own proposal to reduce health insurance costs, which will also be voted on June 9th.

It provides for a ‘brake’ on health costs, which should evolve according to the economy and wages.

This brake would work in the same way as the federal spending brake. Therefore, when healthcare costs exceed wages for a given year by 20 percent, the government must take action to bring the  costs down.

The government is asking voters to turn down the Centre’s proposal because it doesn’t take into account factors such as demography, technological progress in healthcare, as well as the dependence of salaries on economic developments.

Here too, the Federal Council and parliament have put out their own counter-project, providing for more targeted measures, including specific cost control objectives for healthcare services.

Are there any other proposals on the table aiming to curb the cost of insurance premiums?

Yes.

While they are not on the ballot, two ideas have been debated in past months.

One calls for scrapping multiple private carriers  in favour of a government-run single health insurance scheme, similar to that in the EU. 

The other idea floating around is to replace the current system where rates are determined by factors such as age and canton of residence, and base them on wages instead. 

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