Health insurance: choosing premium and deductible

In Switzerland, basic health insurance is mandatory for anyone residing in the country, but the law leaves the insured a valuable freedom: to choose the insurer, the deductible and the model. These are decisions that, for the same benefits guaranteed by law, can make a family’s annual spending vary by several thousand francs. Understanding how the premium and the deductible work is the first step to not paying more than necessary.

Premium and deductible: two linked levers

The cost of basic insurance (LAMal, the compulsory health insurance) revolves around two figures that move in opposite directions:

• the monthly premium, which is paid in any case, regardless of whether you receive treatment or not. It varies according to insurer, canton, premium region and age, but does not depend on income;
• the annual deductible (“franchise”), that is, the amount of care the insured pays out of pocket before the insurer steps in.

The rule is simple: the higher the deductible you choose, the lower the premium, and vice versa. The lowest deductible entails the highest premium; the highest deductible offers a discount on the premium but exposes you to greater costs in the event of illness.

Beyond the deductible: the cost-sharing rate

Once the deductible is exceeded, the insured is still not covered 100%. The percentage cost-sharing rate (“retention”) kicks in: a share of the cost of care beyond the deductible, up to an annual maximum ceiling. On top of this, for hospital stays, there is a small daily contribution to hospital costs. All of these elements must be taken into account in the cost-benefit calculation, not just the premium.

How to choose the deductible

Choosing the deductible is an economic decision, not a medical one: the benefits covered remain identical. The reasoning is a comparison between the premium savings guaranteed by a high deductible and the expected medical expenses:

• those in good health who rarely need care tend to find the higher deductible worthwhile: they save on the premium every month and rarely end up spending the entire deductible;
• those with recurring treatments, ongoing therapies or predictable medical expenses are often better served by a low deductible, because the more expensive premium is offset by lower direct spending.

A common mistake is to instinctively choose the minimum deductible “to be safe”, ending up paying high premiums even in years without treatment.

The insurance models

Another savings lever, often more effective than the deductible alone, is the choice of model:

• family doctor: you first turn to a reference physician;
• HMO: first contact at an affiliated practice or centre;
• Telmed: first a call to a telephone advice service.

Compared with the standard model with free choice of doctor, these models offer reduced premiums in exchange for a somewhat less free path of access to care. For many people the savings far outweigh the small constraint.

Changing insurer and optimising every year

Premiums and conditions change every year, and not all insurers cost the same for the same benefits. It is possible to change insurer for basic insurance by observing the applicable notice periods. Reviewing your policy at the end of the year — comparing premiums, deductible and model — is a good habit that is worth the time spent.

The premium reduction

Those with modest incomes may be entitled to the individual premium reduction, a form of support managed at cantonal level with criteria and amounts that vary from canton to canton. Many eligible people do not claim it simply for lack of information: it is always worth checking with the authorities of your own canton.

Mistakes to avoid

• Looking only at the premium and ignoring the deductible, cost-sharing rate and model.
• Choosing the minimum deductible out of habit, without doing the maths on actual care.
• Forgetting the notice periods and being stuck with an expensive policy.
• Confusing basic insurance (LAMal) with supplementary insurance (LCA), which follows entirely different rules.

How we work at SIH ONE

We help those who move to Switzerland or hire staff here to find their way through the healthcare system: checking legal obligations, setting up cover for newcomers, making a considered choice of deductible and model, and coordinating with the social insurance schemes.

Are you moving to Switzerland or want to review your health insurance to pay the right amount? Discover our services relating to permits and set up your cover as efficiently as possible.