The estimated 130,000 residents of Zug are among the luckiest people in Switzerland.
Not only are their tax rates lowest in the country, but their health insurance will also cost — at least temporarily — less than elsewhere.
That is because their government has decided to use surpluses in their public coffers to significantly reduce health insurance premiums paid by the local population.
What will happen?
“In recent years, Zug’s public finances have developed very favourably,” the canton announced on July 11th. “Part of the surplus generated will flow directly back to the population.”
The aim is for the canton to cover “almost all of the costs” — 99 percent— of inpatient hospital treatment for Zug patients in 2026 and 2027, at the cost of 220 million francs.
“This will mean that the 2026/2027 premiums for compulsory health insurance in the canton will be around 18 percent lower on average.”
The Health Insurance Act stipulates that the cantons cover at least 55 percent of residents’ hospital bills. Almost all the cantons base their calculations on this minimum amount.
In Zug, however, the canton’s share will be increased to 99 percent for two years. The remaining 1 percent will be paid for by health insurers, authorities said.
READ ALSO: Why do Swiss healthcare premiums vary so much per canton?
How will this lower the premiums?
“If the canton covers 99 percent of the costs for inpatient health services for two years, health insurers will have to take this into account when calculating premiums for 2026 and 2027,” according to the press release.
“The average premium will then be around 18 percent lower, or around 700 francs per person per year.”
This is, however, a general estimate, with the actual reduction based on the insurance model, age group, and health insurance company.
The details of this measure must be worked out by spring 2025, so that the premiums can be reduced accordingly for 2026/2027.
What will happen then?
The cuts will be in place until 2028, when the cantonal financing of hospital care will be made uniform across Switzerland, if approved by a referendum.
The cantonal parliament will decide whether or not to continue this policy based on the outcome.
Is Zug the only generous canton?
It is the only one so far to lower health insurance rates.
However, bucking the trend seen in many states around the world, all Swiss cantons reported more or less significant budget surpluses in 2022, and some in 2023 as well.
Local populations have, or will, benefit from this windfall.
Geneva, for instance, recorded a budget surplus of nearly 1.4 million francs and will put this money to a good use from August 2024.
Specifically, it will cut taxes, especially for the middle class, and also offer free rides on its public transport network to young people up to the age of 24.
READ ALSO: Geneva to cut taxes and make public transport free for young people
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