Single state fund: Geneva is planning a pilot project

When it comes to health care, the political left has two main concerns: a strong redistribution from top to bottom through the highest possible tax financing and income-dependent premiums, as well as the replacement of private health insurance companies in basic insurance with a single state health insurance fund.

There are currently 39 providers of basic insurance, compared to 145 in 1996. The people have already rejected four proposals for a monopoly fund; The proportion of yes votes increased, from 23 percent in 1994 to 38 percent in 2014. This year, three opinion polls showed yes shares of around two thirds or more.

Opinion surveys without a prior voting campaign have little informative value due to the respondents’ lack of information. But given the political zeitgeist, the single health insurance fund could gain a majority sooner or later – a little sooner with each increase in premiums. The next left-wing popular initiative for a state monopoly fund has already been announced.

Test run as an intermediate step

Among some bourgeois politicians, the desire for fundamental opposition has decreased – not because they suddenly expect a noticeable reduction in costs from a monopoly fund, but because symbolic politics in the spirit of the times is part of politicians’ survival program.

A step towards a state monopoly is no longer a specter even for individual cash register exponents: enabling a cantonal test run to see what it brings – and what it doesn’t bring. A professional initiative by the Canton of Geneva from 2023 for a state monopoly fund in Geneva will not stand a chance in the Health Commission of the Council of States at the beginning of next week. The canton of Geneva has the highest health insurance premiums in the country.

The civil members of the commission include Schaffhausen SVP Council of States member Hannes Germann. When asked, he was critical of the current health insurance system and spoke of a “sham competition”. He showed a certain openness to the Geneva proposal for a cantonal monopoly fund: He would take a closer look at it and had not yet decided.

Exponents from the health insurance industry have recently said that they would not vehemently fight a test run with a cantonal monopoly insurance company. The head of the health insurance company KPT, Thomas Harnischberg, explained in an NZZ interview in June that he personally had nothing against such a test in a canton. A few other voices from the industry said similar things. The basic idea: such a test run would show that the public’s savings expectations are far exaggerated.

Expansion of the experimental article?

When asked, Erich Ettlin, the Obwalden Central Councilor of States, who sits on the Council of States Health Commission and on the administrative board of the CSS health insurance company, was not particularly alarmed about the Geneva initiative. So far, however, he has rejected such proposals, mainly because of the fear that various cantons would soon introduce a cantonal monopoly fund, thus hastening the leap to a national unified fund.

This could be avoided by expanding the experimental article in the Health Insurance Act. This article allows the federal government to approve pilot projects in certain areas beyond the otherwise applicable legal framework, for example to reduce costs or improve quality. “The pilot projects are limited in terms of content, time and space,” the article also says.

The introduction of a cantonal monopoly fund would currently not be permitted. An expansion of the experimental article could make this possible and at the same time ensure that it initially remains a single cantonal pilot project, that the project is limited in time and that an evaluation takes place afterwards.

Such a test would also be a significant turning point. All existing health insurance funds in the canton concerned would have to hand over their basic insurance customer base to the new state treasury. Layoffs of staff could hardly be avoided. The insured people in the affected canton would no longer have a choice of health insurance provider. This could be a problem especially for the lower middle class, as the hunt for cheap health insurance would no longer be possible. And if you change your place of residence out of or into the canton, a change in health insurance would be unavoidable.

Widespread illusions

Ironically, enabling such a cantonal test run was suggested by the comparison service Comparis, which cannot have any interest in the disappearance of private health insurance companies. According to Comparis expert Felix Schneuwly, the test period would probably take around five years. Comparis commissioned one of this year’s surveys, which showed a clear majority for the single fund. The majority of supporters in this survey expected savings of at least 40 francs per month; That would correspond to an average saving of over 10 percent. In another survey this year (commissioned by the consulting firm Deloitte), the average expected savings from a single fund was around 14 percent.

For comparison: the industry’s total administrative costs currently account for around 5 percent of the premium volume – and not 22 percent, as respondents in another survey estimated on average. Of the administrative costs, only around 0.2 percent of the premium volume goes to advertising costs – which are particularly often criticized.

Avoiding advertising would therefore have no noticeable effect on premiums. And if, in a very optimistic scenario, a state monopoly fund could halve administrative costs compared to the status quo, the savings would only be about a fifth as large as advocates hope.

Although a single fund could save certain administrative costs, on balance additional costs would be at least as likely as a cost reduction. A state monopolist would have even fewer incentives to save than the current health insurance companies. And a monopolist’s incentives to develop innovative insurance models would also be lower. Meanwhile, the effect on tariff design is unclear. A monopoly fund would have more market power, which could drive down tariffs. But the political attempts to influence a state monopoly fund would be much stronger, which would probably indicate higher tariffs.