The National Council wanted a strong expansion of premium reductions, which would put the federal coffers in trouble. But the Council of States has decided to leave expansion decisions to the cantons.
Health care costs continue to rise – and with them the health insurance premiums.
It’s supposed to rain, but nothing can get wet. Such five-and-way demands are part of the usual business model in politics. The healthcare system provides an illustration of this: The celebrated outrage at the mostly rising health insurance premiums is part of the routine in Berne, but at the same time the legal framework ensures that there are hardly any major savings incentives among the actors.
As in the current energy crisis, one way to further dampen the incentive to save is to artificially lower prices for consumers. In the healthcare sector, this is achieved through state reductions in health insurance premiums; in politics, a massive expansion with stronger federal participation is under discussion.
The driver of the current expansion discussions is the SP popular initiative submitted in 2020. According to this, the part of the health insurance premiums to be paid by the insured person should amount to a maximum of 10 percent of the disposable income in each individual case – and the federal government would have to pay at least two thirds of the premium reductions.
The money isn’t there
In 2020, 28 percent of those insured received a premium reduction totaling CHF 5.5 billion, around half of which came from the federal government. According to estimates by the Federal Council, the popular initiative would result in additional costs of CHF 3.5 to 5 billion per year – with the amounts increasing steadily depending on the growth in overall healthcare costs.
In June, the National Council adopted a counter-proposal that would also bring a massive expansion of CHF 2.2 billion per year, of which the federal government would have to bear around CHF 1.3 billion. According to the financial plan, the federal government currently has no money for such an expansion: it would have to save somewhere else or raise taxes. However, the majority in the National Council does not currently want any tax increases and also wants to spend more taxpayers’ money in other places instead of saving (such as in the army).
So it seems to be up to the Council of States to remember the laws of elementary school arithmetic. According to the current status, an expansion in the scope of the National Council proposal is clearly not capable of winning a majority in the small parliamentary chamber. The Social Committee of the Council of States had endorsed a counter-proposal that is close to the concept of the Federal Council. This proposal contains certain minimum requirements for the cantons: it would result in additional cantonal costs of around CHF 500 million per year and no additional costs for the federal government.
Successful single application
But the Council of States decided on Wednesday by 22:20 votes not to decree any expansion of cantonal premium reductions at all. The Council thus followed an individual motion by the St. Gallen Central State Councilor Benedikt Würth not to go along with the idea of a counter-proposal to the popular initiative. The Council of States had not yet taken a formal position on the popular initiative, but anything but a clear rejection would be a big surprise.
In justifying his application, Würth explained that he saw a need to expand premium reductions, but that this should be the responsibility of the cantons. There are major differences between the cantons in terms of social goals, healthcare costs and economic strength, and they know best what is appropriate for their circumstances. His canton has just decided to expand by CHF 36 million.
Würth also refrained from citing the incentive effect in favor of cantonal responsibility: The more the cantons could pass on the costs of the premium reduction to the federal government, the less incentive there would be to curb healthcare costs, for example through hospital planning.
In the current system, the federal government pays 7.5 percent of the gross costs in basic health insurance to the cantons for the premium reduction. Meanwhile, the cantons have a great deal of leeway in determining their premium reductions. According to Würth, the proposals discussed would bring about a “paradigm shift” in the form of federal requirements for the cantons. The opposite is better – a consistent unbundling.
Würth envisages the cantons taking over the full financing of the premium reductions in future and the federal government in return bearing the full financing for the supplementary benefits (instead of the current 62.5 percent). However, there are overlaps, because in 2020 a good half of the premium reductions went to recipients of supplementary benefits or social assistance. In principle, with an increase in health insurance premiums, the basic need of those affected, which is decisive for the calculation of supplementary benefits and social assistance, increases – which means that social benefits also increase.
Misleading Numbers
The question of unbundling is likely to come up later in more concrete terms. In the short term, in the context of the SP popular initiative and the counter-proposals, it is “only” a question of whether the federal government should play a greater role with regard to minimum requirements and/or financing.
In the Council of States, representatives of the Left put forward three arguments in favor of a stronger federal role: health insurance premiums have risen faster than wages, so that many insured persons today have to pay 14 percent or more of their income for premiums; the cantons have reduced their share of the premium reduction; and the federal government, as the sender of the legal framework in the form of the Health Insurance Act, shares responsibility.
As is so often the case, the numbers are misleading. According to that recent external monitoring report on behalf of the Federal Office of Public Health (for the year 2020), measured against the average paid health insurance premiums, the average net burden in the low-income model households examined was 9.4 percent of the disposable income.
It would be almost 14 percent measured only against the theoretical “standard premium” – which does not take into account that most of those affected have lower premiums, for example due to models with a restricted choice of doctor. According to the report mentioned, the cantons’ share of the premium reduction was 48 percent in 2011, 44 percent in 2017 and again 48 percent in 2020.
The decision of the Council of States on Wednesday is not the last word on this matter. The matter now goes back to the National Council. However, based on the signal from the Council of States, it is to be expected that the large parliamentary chamber will slim down its proposal significantly in order to make a counter-proposal to the popular initiative possible.
The gloomy financial prospects of the federal government with a need for corrections worth billions from 2024 also point in the same direction. If the Council of States also decides against a change in the law in the second reading, the idea of a counter-proposal to the popular initiative would definitely be lost.