Guest Column: Switzerland’s mandated health insurance coverage not free health care

By Jim Phelps

Stanley Campbell has more than a few facts wrong on health insurance in Switzerland. I lived in Germany for two years, and in 2005 worked for a Swiss-German company located just north of Zurich.

First of all, health insurance is compulsory in Switzerland. You must pay for it yourself if your company doesn’t. Under Swiss law, the cost per year of having a policy written for you is 300 to 700 Swiss Francs, $280 to $650. For minors, it is limited to 350 Francs/$280 per year. So every year when you have to renew your coverage, you have to pay for writing the new policy. A basic catastrophic plan is about 300 Swiss Francs, about $280 per month, or up to 700 Francs/$650 a month maximum.

It is not dependent on your income, rather your health profile just like in the U.S. If you are in poor health, your premium is more expensive. If your company provides an insurance benefit for you, that benefit, like a subsidy, will only cover 50 percent of the premium. As in my example, $140 a month would be paid by you out of pocket. Most catastrophic U.S. plans covered in tandem by health savings accounts pay 80/20, where you pay the 20 percent deductible up to a certain amount each year, which is a far better deal in comparison to Switzerland.

Swiss insurance policies only cover individuals, not families like in the U.S. This makes the insurance as a whole much more expensive. That means you have to insure each household member individually. Dental insurance is almost always NEVER covered by your employer. Again, if you want dental insurance, it is all out of the individual’s pocket. In the U.S., if your employer pays dental, then they generally also cover your household at an additional cost much lower than what families pay in Switzerland. Tough luck if you have dependents in Switzerland because their dental insurance is once again out of your pocket.

Forty percent of Swiss citizens hold additional health insurance (read private health insurance) above what they may get as a benefit from those employer-sponsored plans. That means that if you want a better room or better services such as a wider range of treatments, you pay more.

Europe is not the Mecca of free health care as some suggest. For instance, in Germany of the late 1980s, about 10 percent of all Germans had additional health insurance like I described above. Now, that number is around 15 percent.

Under the U.S. system presently, if you have corporate insurance tied with a health savings account, you might pay 80/20, which means the premium is paid 80 percent by your insurance through your company. The 20 percent difference is paid by you up to a minimum amount like $5,000. So if you put something into the health savings account over time, you’ve covered your maximum out of pocket in a year.

You can use your health savings account anywhere in the world, so you could use it in any country. If you needed a dental crown, that would normally cost $1,500. You could go to some other country and get the same procedure for a couple hundred. The Europeans travel to Spain to have their medical procedures done, so they can go for a vacation, have their treatment done and relax.

Also, just so you are clear, in Switzerland, health insurance “companies” are NOT called GmbH, which translates into English as “Gesellschaft mit beschrankter Haftung” (COMPANY WITH LIMITED LIABILITY), similar to a LLC in the U.S.

All insurance “companies,” the word Mr. Campbell used incorrectly, are actually not-for-profits. A company is in the business of making a profit. A Swiss NFP insurance incorporation is much similar to a U.S.-based IRS Chapter 503 entity.

In other words: a charity. Not operating to make a profit. Therefore, a charity is not a company. Companies operate to make a profit. Words do have meaning.

Here is the Swiss Administrative Code in German:

Here is a layman’s explanation on German Wikipedia in German:

By the way, I’m for a universal health care system like the U.K. or Canada or a civilian version of the Veterans Administration since I’m also a vet.

Jim Phelps is the owner of Phoenix Traders, Inc. at 215 Seventh St., Rockford.

From the June 2-8, 2010 issue

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