With one of the lowest average rates of inflation globally, Switzerland’s economy would seem to be well “under control”. But one essential and mandatory service that consistently sees price rises above the inflation rate, is that of private health insurance. And while the average rate of inflation has rarely risen over 1 or 2% since 1999, the cost of health insurance in Switzerland has almost doubled in the same period and is now 2.36 times higher than in 1999! This is obviously having a negative effect on disposable income.
Added to the above, complimentary optional insurance is also up a whopping 30% during the same time period. This means that overall disposable income has declined by up to 5.3% over the last 25 years due to the rising cost of insurance.
In this post we look at how Swiss Health Care works and why health insurance is so expensive. What to look out for and how to best handle constantly rising prices.
Great Health Care System, but it comes at a price!
While Switzerland’s health care system has long been recognised as being one of the best in the world, it is certainly not one of the cheapest! This is in part due to the fact that a significant portion of the Swiss health care system is funded by government-mandated private insurance premiums. Some underlying reasons why insurance costs rise each year:
- Several generations of Swiss patients have now come to expect the best hospital facilities, equipment, doctors and treatment to be available.
- Private rooms when in hospital are seen as a “must have” by many, and this all comes at a cost.
- Each visit to a physician, hospital or clinic, means insurance companies have to partly foot the bill.
- Prescription drugs are typically expensive name brands. Generic drugs are not common in Switzerland.
- These represent costs for insurance companies, and have to be clawed back somehow leading to insurance premium price rises.
Switzerland, like other OECD countries, is ageing. Almost one-fifth of the population is already 65 years old or more, a share set to reach 30% by 2060. As a result health spending continues to rise, and it is clear that the government has failed to find any concrete solutions to this issue to date. Significant sums are being spent on subsidising premiums of those on low incomes, but there is no long – or short term strategic plan to change the status quo.
So, how does Swiss Health Care work?
Unlike other countries, there is no free health insurance in Switzerland. All residents of Switzerland must pay for their own health insurance. One of the first things everyone must do within 90-days of moving to Switzerland, is to obtain Swiss health insurance. This is only possible when a residence permit has been applied for, or the person to be insured is registered with a local cantonal authority.
There are many comparison websites – also in English language – where those looking for a health insurance plan can look and compare. Health care plan providers can be changed each year and some even bi-annually.
Switzerland Health Care facts
- Switzerland spends over 12% of its GDP on healthcare. This is one of the highest amounts worldwide. Given the ageing population, this is not set to reduce any time soon.
- Health insurance providers can be switched annually. Some health insurance providers do offer bi-annual cancellation options, but these require a 3-month notice period.
- There are some exceptions regarding mandatory health insurance. These are: – Cross-border workers
– Retirees with EU/EFTA pensions
– Temporary students with international insurance
– Certain officials and diplomats
Pros of the Swiss Health Care System
- Because basic healthcare is mandatory, every resident in Switzerland is entitled to the same coverage and standard of care. The price paid for the insurance cover decides how little or how much.
- Depending on age and the insurance package chosen, the insured person will not pay more if they should get sick or injured.
- Healthcare standards across Switzerland are high, and expats will have no problem finding excellent care no matter where they live or require treatment.
Cons of the Swiss Health Care System
- Healthcare in Switzerland is very expensive, patients pay for most treatment out of their own pocket and are then reimbursed later by the insurance company.
- Any stay in Switzerland exceeding 90 days requires health insurance. There are no exceptions to this rule. If the person does not have valid health insurance protection, they will be issued one by the authorities (which they have to pay for).
What does the Basic Healthcare Cover?
Basic healthcare coverage is offered through private insurance companies. Because insurance is mandated by law, basic coverage is identical across all Swiss insurance providers. Only the terms and conditions vary. You can expect to find the following covered as standard:
- general check-ups and treatments
- hospital visits, including inpatient, outpatient, and emergency services
- rehabilitation services
- prescription costs
- some mental healthcare
- maternity care
- dental emergencies
- gynecological exams
- certain medical aids and devices
- cancer screenings
- eye care for people under 18, and serious illness
- some alternative therapies such as acupuncture and homeopathy
Under a basic healthcare plan, a good guide is that between 80–90% of the insured person’s medical costs should be covered.
Summary & Tips
When looking for a health insurance plan in Switzerland, it pays to do some research.
- To start: visit some of the many comparison websites or service providers offering a wide selection of partners.
- Decide: what cover is required?: As coverage and type of service can vary according to price paid for the insurance cover, it pays to read the small print. Most of the sites are in multiple languages including English.
- Ongoing: Conduct a regular audit of insurance providers to get a comparison and check prices and cover offered. Always be on the lookout for a good deal!
There is no getting around it – healthcare insurance cover is obligatory and expensive in Switzerland! Each year the prices rise (mostly above the rate of inflation), so it pays to dedicate time to understand what insurance coverage is required and the insurance providers in the market. The good news is this is a well documented subject and information and insurance plans are mostly also available in English.
Accurity is SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs, contractors and recruitment agents. Our core services include Employer of Record or EOR for contractors and international and domestic clients wishing to engage contractors. We also supporter our contractors and clients with advice on state and private pensions, health insurances and on housing and other cost of living services and insurance plans. Our pricing system is fair and transparent. We are based in Switzerland and have excellent local knowledge and connections. Contact our team to see how we can help you.