LETTER FROM GENEVA
It's a ritual that returns as the leaves turn yellow. Every year, for the 11 years he's been in office, Swiss Health Minister Alain Berset (Swiss Socialist Party) announces to his fellow citizens, with a gloomy and worried expression, that adjustments are "difficult and painful," but also "unfortunately unavoidable." What is he talking about? The ever-increasing monthly health insurance premiums for the following year, which the state has been unable to control since the introduction of the Federal Health Insurance Act (KVG) in 1996.
Since its inception, the acronym has been as unpleasant to the Swiss as the reality it represents. Year after year, the month of September deals yet another blow to household budgets. After a 6.6% increase in 2023, a further jump of 8% to 9% should be revealed in the next few days in 2024. This will be followed by a wave of grievances, followed by weeks of turmoil, as everyone anticipates the next year's rise, blending a mixture of fatalism and assertive liberalism.
"I'm fed up, like almost everyone else in the political class," said Gerhard Pfister, president of The Center party (center-right), around this time last year. "Nothing changes. The Swiss healthcare system is of exceptional quality, but it has become far too expensive. And none of the players in the sector – insurance companies, doctors, hospitals and cantons – has any interest in cutting costs." In some cases, premiums have doubled in less than 20 years. It is not uncommon for the health insurance bill for a couple and their two children to reach 1,500 Swiss francs (€1,562) a month, while the median salary in the country is around 6,000 Swiss francs (€6,250).
Originally conceived as a hybrid public-private system designed to stimulate investment, moderate expenditure and maintain the very high standard of the Swiss healthcare system, the KVG was primarily intended to avoid the bureaucratic pitfalls of the British NHS or the French "Sécu," the two most frequently cited deterrents. A typically Swiss compromise, it requires individuals to be insured, but they can only do so through the intermediary of several dozen insurers, who compete fiercely to acquire new customers by targeting the "right risks." In this way, young, healthy people can obtain good rates.
In practice, rate differences are minimal. It's the zip code that counts. French speakers, who earn less, pay more than German speakers, city-dwellers more than country-dwellers and the elderly more than the young. Considered by some as a highly unequal system, and by others as a system that encourages unnecessary medical expenses, it is in fact only semi-mutualized. Actuaries have succeeded in refining their calculations of costs and returns to a level that allows them to differentiate premiums not only by gender and age but also by canton and even commune of residence. To put it bluntly, the sturdy inhabitants of a village in the rural canton of Appenzell, who complain less, have never seen a psychiatrist and treat themselves with natural herbs, pay four times less for their insurance than the unwell inhabitants of the Basel metropolis.
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