The Swiss Health Care System

Anybody who claims that what is being proposed resembles the Swiss system is either a liar or is incompetent to make the comparison.

It is true that the Swiss system was designed to continue in existence the private health insurance companies that existed before they reformed their system. But from an economics perspective, this is nothing more than a legal technicality.

The Swiss health insurers were (and are) forbidden to charge people for profits and for excesses such as executive pay packages in the tens of millions of dollars. They are only allowed to charge for costs certified as necessary and reasonable by the Swiss Government. And the Swiss Government can and does take many different actions to directly keep costs under control. For example, the Swiss government has the power to and will from time to time subsidize the training of doctors who would not have come into being otherwise.

Another huge difference between the Swiss system and the disastrous one proposed by Obama and the health insurance executives in the US is that in the Swiss system, 100% of the cost of health insurance premiums are provided to low income people by the Swiss Government, so that low income people in Switzerland end up with the same exact health care that more fortunate people get, at no cost to them. Whereas in the US, it is proposed that very low income people get put on Medicaid, which is well known to be a substandard health care system.

The Swiss economy in general is a more progressive, fairer system, and so the large scale poverty you see in the US is not seen in Switzerland. As a result, you can bet the ranch that the health insurance subsidies paid by the Swiss government to individuals across the board, at all of the lower income deciles, are going to be much more progressive, realistic, and workable than any "subsidies" coming in the US.

You can bet the ranch that subsidies for those earning between roughly $15,000 and $30,000 in the US are going to be ridiculously small compared with what the Swiss subsidies at that level would be. The US could not afford health insurance subsidies as generous as the Swiss ones if it wanted to pay them (which it doesn’t) because (a) health insurance is far more expensive in the US than it is in Switzerland and (b) there are grossly more low income people in the US than there are in Switzerland, both in absolute numbers and in percentage terms.

Overall, the Swiss system is economically comparable to systems where the health insurance companies actually go out of existence, replaced by government sponsored or government run entities. Specifically for example, the Swiss system is much more similar to the German system than to what is proposed by Obama and the US health insurance executives.

The Swiss system is not comparable to the one being proposed by Obama and the health insurance executives, except in the one, economically meaningless technicality discussed earlier. Anyone who claims otherwise is either lying or does not know what they are talking about.

Now I have some more details I discovered while doing additional research on the Swiss system. This extends my earlier review of the Swiss system. That system, although not as progressive as one I would choose, would be a massive improvement over the US system, were it actually possible to have it in the US. But even the Swiss system is out of reach for the US due to heavy corporate executive control of the US economy.

Swiss health insurance premiums average roughly $250 per month for an individual, which is roughly half what the same thing costs in the US. This is a little more than I thought they were, but is still obviously far less than in the US.

The Swiss have all kinds of "public options," which in the Swiss system are insurance companies that are completely public. In these companies, certain costs that are still allowed the private health insurance companies even under the heavy regulation do not exist.

In Switzerland, you don't have to be insured by a private health insurance company at all (if you choose a public one). So obviously you are not forced to pay for any profits or for any excessive salaries at all, let alone forced to pay for billions of dollars for shareholder profits and obscene executive pay packages.

Clearly, if someone opts to be insured by a public health insurance company (where by law they end up with the exact same care) their premium is going to be lower than the Swiss average. I would wager that you can buy Swiss health insurance for $200 a month if not even a little less than that.

Try getting that in the US, laugh out loud. A company offering insurance for $200 a month in the US would be a scam to one extent or another, and/or the deductible would be so huge that the policy would be worthless.

In Switzerland you can have a deductible of up to about $2,400. If you choose that highest deductible and also choose a public insurance company, I would estimate that your monthly premium would be roughly $150 a month. This is roughly 75% less than health insurance can easily cost an individual in the US!

Don't forget that unlike in the US, the care itself is the same for everyone in Switzerland; the care does not differ depending on how you get the health insurance.

And again, lower income individuals are going to be far more heavily subsidized than could or will ever be the case in the US.

The bottom line is that although the Swiss system may not be the best or most fair in the world, it is a slur on the Swiss system to say that what the US executives are proposing is similar to the Swiss system. In fact, the US could not have the Swiss system if it wanted to, due to both political and economic factors.