How to optimise your health insurance in Switzerland ????

You read the news: The 2023 health insurance premiums are going up.

We have become accustomed to premium increases, averaging more or less 3% per year, but next year is on another level: the premiums are increasing by almost 7%. That is mainly due to the pandemic!

Let's take this opportunity to understand a bit better how the system works, and discover how to optimise our situation.

In a nutshell

Health insurance premiums are linked to healthcare costs.

To reduce these costs, the first thing we can do is to stay healthy as long as possible. For example, by eating healthy and exercising regularly.

Then, we have 6 levers to help us reduce the health insurance bill:

1. Adapt the deductible: If we have low medical expenses, it is better to have a high deductible (if we have some money aside), and if we have a lot of expenses it will be more interesting to keep the deductible at CHF 300.-
2. Change the care model: An alternative model allows us to save money
3. Remove the accident coverage: If we are employed more than 8 hours per week we are covered by our employer's insurance
4. Suspend the health insurance in case of military or civilian service of more than 60 days
5. Change insurance provider: we can consult Priminfo to compare insurers
6. Apply for subsidies in case of low income

How it works

In Switzerland, the basic health insurance, the LAMal (in French and Italian) or KVG (in German), is mandatory for everyone.

Everyone must have one, the benefits are the same, and everyone is free to go to any insurance (insurers cannot refuse anyone). Unlike supplementary insurance, where insurers have the choice to insure us or not (that's why we have to fill out health questionnaires).

Back to the basic insurance: We will contract a policy valid for one year, it always starts on January 1st and expires on December 31st. The insurers have until the end of October to inform us of the rates for the following year and we have until the end of November to terminate our contract if we wish to do so.

This insurance, we will have to contribute to it and therefore the premium we will pay depends on two factors:

1. Our age category. There are 3 categories: children from 0 to 18 years old, young adults from 19 to 25 years old, and adults over 26 years old.
2. The risk zone in which our town is located. The whole country is divided into 4 zones defined by the confederation. To change zones, you have to change towns.

What is covered in the basic insurance?

We are lucky to be in Switzerland and to have good coverage in general. All our medical expenses, whether it be doctors, hospitalisation, medication, etc. are included in the basic insurance.

Of course, there are exceptions such as dental expenses, alternative medicine or off-list medication for which the basic insurance does not cover and therefore supplementary insurance has been created to compensate for this. These supplementary insurances are not necessarily accessible to everyone, so we will not discuss them in this article.

The care models

In the basic insurance, there are different care models, i.e. different ways to access care.

With the basic model it is simple: we do as we wish, we go to whom we wish. That is the most flexible model, but also the most expensive.

We also have alternative models such as the general practitioner (GP) whom we see first, group practices or health maintenance organisations (HMO) with which we commit to consulting first certain contacts within a certain network, and finally telemedicine models where we first have a call with a medical hotline.

What to pay: Premium + Deductible + Co-payment

From a financial standpoint, we have to pay a fee: the premium, which is usually paid monthly.

When we have expenses, a deductible is added to the premium: it is the amount we have to pay before the insurance starts covering our expenses. The basic deductible is CHF 300 and can go as high as CHF 2'500.

And finally, there is the co-payment which is a second amount that we have to pay once the deductible is covered. We contribute to another 10% of the costs, up to a maximum of CHF 700, before the insurance covers the costs fully.

Some examples?

1. Let's say I have a deductible of CHF 2,500. I go to my doctor several times and I have CHF 1,000 worth of medical expenses over the year. As these costs are lower than my deductible, I have to pay CHF 1,000 out of my own pocket.
2. Second example with a deductible of CHF 2,500. This time I have CHF 5,000 in expenses throughout the year because I had to go for several visits in a row. I have to pay the first CHF 2'500 of the deductible. After that, there is still CHF 2'500 (Expenses 5'000 - Deductible 2'500). This is where the co-payment comes into play: We will take 10% of the remaining CHF 2'500, which is CHF 250. In total, I have CHF 5'000 of medical expenses and I will pay CHF 2'750 (Deductible 2'500 + Co-payment 250).
3. Extreme case: I still have my deductible of CHF 2'500 and let's imagine that I have CHF 100'000 of medical expenses. This is the worst case scenario, I had a lot of problems. First, I pay my deductible of CHF 2'500, so I have CHF 97'500 left to cover. 10% of CHF 97'500 is CHF 9'750. The good news is that the co-payment is capped at CHF 700. So my co-payment will be CHF 700. In total I will pay CHF 3'200 (Deductible 2'500 + Co-payment 700).

Choosing your deductible

You have to be careful when choosing your deductible. I have carried out simulations on all the insurances and deductibles in order to determine the total costs to be paid by us (premium + deductible + co-payment) to better understand which deductible is the most adapted according to the situation of each one.

We realize that in general we always have the same pattern:?

First the deductible of CHF 2'500 is clearly the most advantageous, up to a certain point, and then we switch to the deductible of CHF 300.

This transition from the purple line (deductible at 2'500) to the blue line (deductible at 300) is found on all models without exception. The decisive point is the point where the two curves meet, around CHF 1'900.

CHF 1'900.- of annual medical expenses, that is the amount that allows to decide which deductible to choose.

Two points to keep in mind:

1. We realize that intermediate deductibles are not advantageous.?
2. Do I have few or many medical expenses? If I have few costs, a deductible of CHF 2'500 is more appropriate. But be careful: The deductible of CHF 2'500 is good if you have few health expenses but you never know what might happen, so it is important to make sure you have some money aside just in case. If I have a lot of health expenses, the deductible of CHF 300 is clearly better. To get an idea, I invite you to look at your history of previous years: did you have more or less than CHF 1'900 in medical expenses?

To save money

Adapting the deductible

But we have to be careful with two points:

• We must make sure to have savings to cover the expenses if we have any issue: with CHF 2'500.- of deductible and up to CHF 700 of co-payment it will be complicated if we don't have any money aside.
• We must make sure that we have low health costs (less than CHF 1'900 per year), because if we have a lot of health costs, a high deductible will not be in our favor.

Changing the care model

As we have seen before, we can have the basic model but we can also reduce our costs by choosing an alternative model such as telemedicine, general practitioner, or HMO.

Remove accident coverage

It can be included in our basic insurance, but it is redundant if we have a job of more than 8 hours per week, which is normally the case for most of us. In this case, our employer's accident insurance will cover us, which renders the one from our health insurance obsolete, so we can ask our insurance to remove it to save money.

Suspending insurance

If I am going on civilian or military service for more than 60 days, I can ask to suspend my health insurance since in this case it is the insurance of the service that comes into play.

Changing insurance provider

I can use a comparison tool to find out which insurance is the most advantageous.

The official portal of the confederation is free and accessible to all: Priminfo lists all insurance, with all deductibles, for everyone.

It is very easy to use, even though it is not available in English: I just have to enter my postal code (or municipality), my year of birth, the desired deductible, select or not the accident coverage and click on "Calculate". We can even compare with our current insurance.

The site then displays the amount of all insurance premiums from all insurers, which makes it very easy to compare which insurance is the most advantageous.

Apply for a premium reduction

There are subsidies for low income individuals. In this case, the canton helps us to pay a part of the insurance premiums. Simply contact the cantonal institution in charge.

Don't forget

The increase in health insurance premiums is clearly linked to the increase in healthcare costs. Of course, there are administrative costs, about 5% of the total, which are used to cover the administration of the insurance, such as the infrastructure cost, personnel, etc., but the rest, i.e. 95% of our premiums, are really healthcare costs.

To avoid costs in general it is advisable to favor generic drugs, to avoid over-medication or to consult only if necessary. This does not mean that you should never go to the doctor. If you need to, do it!

But above all, the first thing we can do is to make sure we stay healthy. By eating well and exercising regularly, we stay healthy and have fewer expenses.