Voluntarily reduce reserves to compensate for high premiums
The Federal Council has suggested that the Swiss health insurers should voluntarily reduce their high reserves. This should be done in favor of the insured. To this end, the Federal Council proposes that the conditions that apply to insurers and under which they can voluntarily reduce their reserves be relaxed. At the same time, it should not be possible to use the reduction in reserves to attract new insured persons and thus subject them to commercial interests.
The Federal Council also defines a relationship that arises between income and expenditure, with the income coming from the premiums paid by the insured. The health insurances must have this newly defined relationship in order to be able to tackle a reduction in reserves. This requires an application to offset the high premium income, which must be granted. The Federal Council would also like the requirements that apply to reduce reserves to be laid down in the Health Insurance Supervision Ordinance. So far they have been sent to the health insurance companies in circular letters. The background is that this is intended to strengthen the legal security of insurance companies.
Premium reduction positive for low-wage earners
At the end of 2019, the reserves of the health insurance companies were around 11.3 billion Swiss francs, which was one billion more than at the end of 2018. The registers had set a new record. However, the Federal Office of Public Health does not intend to announce the actual reserves for a few days or weeks; this should happen at the same time as the announcement of the new insurance premiums.
The health insurers can apply to the Federal Office of Public Health to offset the premiums. But is that only possible if the income? so the premiums? in the relevant canton in that year exceeded the accumulated costs. The Federal Office of Public Health sets a standard of solvency that the health insurance company in question must still achieve. This quota must be 150 percent and that after the depletion of reserves and under adverse circumstances. Only then can the reserve reduction be approved in principle. Whether or not this is the case in individual cases has to be decided individually.
For the current year, the Federal Office of Public Health plans to reduce CHF 27 million, at least the BAG states this amount on its own website. In the previous year, the reduction in reserves was significantly higher, the approved compensation payments were CHF 158 million. The Swiss Confederation of Trade Unions is now calling for a higher reduction in reserves in the current year. Low-wage earners, in particular, would benefit if the premiums were lowered. This is especially true against the background of the still current Corona crisis, which has led to massive losses in income in some cases. Low-wage earners could get some relief and at the same time insurers would not use the depletion of reserves for commercial purposes.
Conclusion: Federal Council calls for a reduction in reserves
The reduction of the very high reserves, as the Federal Council put it, would mean that low-wage earners in particular would be relieved through lower premiums. The currently targeted reduction is around 27 million, which would be almost a sixth of the reserve reduction from the previous year.
However, it is not known why the Federal Office of Public Health is setting the reserve reduction so low. However, it is actually not limited to this sum, nor is the type of reduction through a reduction in premiums or through special payments.
