Swiss citizens are facing a massive hike in their health insurance bills next year. The government approved on Friday an average increase of nearly 10 per cent for basic compulsory cover.
The rise is considerably higher than inflation, which stands at under two per cent, and means Swiss adults will pay on average SFr245 ($151) per month for their premiums.
The cost varies from canton to canton. Rates remain highest in Geneva at SFr363, while people in canton Appenzell Inner Rhodes pay only SFr163 on average.
Health premiums have risen by more than the rate of inflation for many years. The biggest recent increase was in 1997, when prices went up by nearly 12 per cent.
The insurers say that even with this year's increase of 5.5 per cent, they are facing a shortfall of over SFr450 million, which have been paid out of the companies reserves. "Next year's higher premiums will not allow insurers to recoup their losses from previous years," said Peter Marbert of Santésuisse, the insurers' association.
The government has proposed some measure to alleviate the short-term pain for families. Unused subsidies for premium payments, around SFr400 million, will be distributed to families with two or more children.
The smaller insurance companies will also be allowed to pool their reserves, in a move aimed at lowering premiums.
Longer-term solutions will be proposed towards the end of the year, at the end of a five-year evaluation of the federal health insurance law.
The hike in next year's premiums has sparked outrage among the country's main political parties. The Swiss People's Party said the rise was proof that the system was failing, while the Social Democrats proposed a freeze on price rises for a year.
In 1995, a law aimed at slowing the increase of health costs was introduced, but analysts say this has so far failed to slow price rises. The Social Security Office says premiums have increased on average by more than six per cent every year since the law went into effect.
Over the past three years, the increases had remained under the average, raising hopes that spiralling costs were being reined in. But next year's hike seems to indicate a reversal of that trend.
Analysts say the price rises are related to the increasing cost of pharmaceutical products. "Prices for medications have gone up 40 per cent over the past five years, although there has no increase in terms of volume," says Jacqueline Bachmann of the Foundation for Consumer Protection.
"But there are also too many players in the healthcare market," she told swissinfo. "Towns often have too many specialist doctors, for example."
Another factor leading to higher costs was an increase in the use of outpatient services in hospitals, which is entirely billed to the insurers.
Families hit hardest
People with lower to middle incomes are likely to be worst hit by the increases, particularly families. "The premiums are raised every year, but our salaries don't keep up," says Marie-Dominique Raffier, a mother of three.
Raffier, who lives in Bern, pays around SFr400 a month in premiums. This includes extra cover for items such as dental care or the choice of hospital, which are not included in the basic insurance. "Basic insurance doesn't include many things I consider necessary, so I have to pay extra," she told swissinfo.
Consumers have the choice of changing their insurance company when the new rates are published, but only three per cent of them would actually bother according to a recent poll, even though the savings can be significant in the short term.
"The costs remain the same and are just transferred to a new insurer, who will eventually have to increase premiums," says Bachmann.
Insurers have suggested ways of lowering premiums, including establishing lists of doctors whose bills they are prepared to reimburse. But consumers are not necessarily ready to accept this condition.
"I don't mind having to consult first with my family doctor before seeing a specialist," says Raffier. "But I want to have the choice of seeing the best doctors around if I feel it's necessary."
by Scott Capper
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