|The end of universal coverage has been averted|
|Implemented in this survey?|
The prospects for a rapid solution to the problem of the suspension of universal coverage for citizens who do not regularly pay their premiums ? highlighted two years ago ? were definitely too optimistic. The bargaining between cantons and insurers did not achieve a positive outcome, making a formal change of legislation through the Parliament necessary. In 2011 Switzerland will be back to universal coverage, but the door for the exclusion of unwilling-to-pay citizens will remain open.
On August 16th the Nobel Prize winner and editorialist of the New York Times, Paul Krugman, commented on the health reform project presented by the American President Obama in these words: "So where does Obamacare fit into all this? Basically, it's a plan to Swissify America, using regulation and subsidies to ensure universal coverage" [see ref. 1].
Most probably none of his American readers were aware of the fact that the coverage of medical care cost offered to Swiss citizens for some years could not be considered universal. On January 1st , 2006, a reform of the Federal Health Insurance Act (FHIA) came into force that allows health insurers to suspend coverage of health care services consumed by citizens that are not willing to pay, or cannot afford their health insurance premiums. The aim of Parliament was to provide a strong incentive to Swiss citizens, pushing also the reluctant insured, to pay their health insurance bills in due time.
Contrary to expectations, the number of insolvent insured has not decreased after this amendment was signed into law. Instead, their number has continued to grow, surpassing the threshold of 150,000 units in the meantime: more than two percent of the people obliged by law to make a health insurance contract (the figure is a very rough estimate; in some cantons where a more exact census of the number of suspended insured has been carried out, the percentage reaches even 4,3 percent of the insured). Very soon policy-makers and public officials realized that the sanction of the suspension of coverage for those in arrears hit not only those people who did not want to pay their dues even if they had the means, but also the insured who did not have sufficient resources to cope with the continuous increases in health insurance premiums.
So as not to reverse the enactment of the law by modifying an article recently applied few months later, the Federal Council considered it sufficient to seek a remedy in an application decree (that is a regulation defining the details relative to the enforcement of a given law). More precisely, with the amendments of the decree that came into force in August 2007, the federal administration granted the possibility to make an exception to the suspension of the services of insolvent insured by means of contractual agreements between cantons and health insurance funds. Some cantons (Basel Stadt, Geneva, Neuchatel, Valais and Vaud) thus signed a contract with the insurers, committing themselves to come up for the premiums in arrears and the corresponding interests for all those citizens whose injunction for debt procedures ended in the emission of a certificate attesting insufficient assets (that is with the proof of the debtor's insolvency). In exchange, the insurers would not suspend the coverage of services and would continue to reimburse treatment also for those who were not up to date with their premium payments.
Unfortunately, these contractual agreements, which the insurers may (but do not have to) comply with, have proved to be very fragile (often the defection of one single insurer was enough to lead to a breach of the entire contract) and above all it is difficult to apply them generally to all the cantons. In compliance with the principle of subsidiarity, the instance thus passed on to the next level and an attempt was made to find a contractual agreement at the national level, on the one hand summoning the representatives of the Conference of Cantonal Directors of Public Health to the discussion table and the negotiators of Santésuisse (the blanket association of the health insurers) on the other. In May 2008 [see survey round 11(2008)] the negotiation seemed to have achieved a result ... but the climate of reciprocal distrust between the contractual partners, evolved during years of heated discussions on the various reform dossiers when cantons and insurers often found themselves on different sides of the fence, dilated the times for the formal signing of the treaty. On both sides attempts to raise the stakes were not absent, each claiming a change to the contractual terms in their own favor.
So in February 2009 a final breach in the discussions took place, which was followed by an unsuccessful mediation attempt on the part of the Federal Department of Home Affairs. Uable to find a solution through negotiation - unequivocal sign of a polarization of interests at stake and of increasing difficulties of the system in solving the issues by the usual instruments of corporativism - Parliament was persuaded of the need to find a way out of the situation through an amendment of law. On 25th March, 2009, the Committee of Social Security and Health of the National Council approved an amendment of article 64a of the FHIA, followed by the adhesion of the counterpart Senate Committee (the Council of States) without any opposition whatever. The reform bill does not represent a return to the past (status quo ante), as hoped for in a cantonal initiative presented by Canton Ticino, but a new body of law presented in August 2009 [see ref. 2], which obtained favorable advance notice on the part of the Federal Council itself [see ref. 3]. These are the principal elements contained in the draft bill [see ref. 4]:
The debate on this amendment [see ref 5] has dragged on over three parliamentary sessions; the discussion started in September in the National Council, continued in December in the Council of States and a new passage in both chambers was necessary in the spring session, with an appeal in the Chamber of Arbitration due to the lack of an agreement on an aspect of detail. The new articles of law 64a and 65 [see ref. 6] can only come into force once the deadlines for the launching of a referendum have passed, that is not before August 1st 2010.
|Medienpräsenz||sehr gering||sehr hoch|
|Implemented in this survey?|
Essentially this law amendment takes up again the contractual terms of a standby agreement that seemed to exist between the cantons and health insurers before the breach in discussions. For this reason a formal consultation process was not realized. The consensus was general on the need to solve the problem of the suspended insured rapidly; in both chambers the discussion was welcomed unanimously. But a difference in points of view between center-right and center-left parties emerged on an aspect of detail.
The reason for this is not so much a counter-position in values as the uncertainty about the real causes that had lead a growing number of Swiss insured not to pay their premiums. As suggested by Fuchs (1996) [see ref. 7], if the existing empirical evidence on a particular problem is poor, policy-makers are pushed to rely on their own beliefs, which are usually driven by ideology. In this case the uncertainty concerns the proportion of insured who do not pay their bills because they can't afford community-rated premiums and the proportion of the reluctantly insured, people who opt for free-riding, trusting that the government will intervene in their support if they should urgently need health care at some time.
According to the center-left almost the total number of insured in arrears belongs to the group of people obliged to bear an excessive financial burden because of the extremely regressive financing system of Swiss health insurance [see 8 for an updated evaluation of the level of vertical equity in Swiss health care financing]. For the center-right, the opposite is true: insured who do not pay are mainly citizens who do not respect the social contract and do not assume their own individual responsibility. These opposing points of view were expressed by the two political wings very clearly during the parliamentary debate [see ref. 5].
Establishing where the truth lies is a matter which is not at all simple and presupposes a detailed study of the average profile of those people, whose health care cover has been suspended. The data available are somewhat sketchy and it is difficult to link the information recorded in the various datasets (tax information, social-economic information etc.).
A pilot study was commissioned by the government of Canton Ticino (limited to the suspended citizens resident in this canton) and published in July 2009 [see ref. 9]. In the sample of suspended insured, compared to the resident population, an overrepresentation can be seen of people aged 20-59, of divorced or single people and foreigners, of people who receive a subsidy for their health insurance and people who benefit from other forms of social aid.
A second interesting point of comparison is that 45 percent of the suspended insured do not have regular taxation; 35 percent were taxed automatically. This practice is set in motion when a person does not fill in his/her own income declaration. The incomes are estimated by the tax administration and slightly increased for penalty purposes, aiming at sanctioning the lack of respect of the rules and deadlines of the ordinary taxation procedure. As a result of this increased income, it is possible that people who would normally have a right to a subsidy because of their real economic situation are deprived of it. A large number of the people who are suspended indicate an income close to, if not below, the threshold for social intervention. It cannot be excluded that these people are facing living conditions that are more precarious compared to those who receive social aid, by virtue of a strong "threshold-effect". It must be noted that Ticino is among the Swiss regions with an average income that is 14 percent lower than the Swiss average, whereas the premium level is among the highest. Finally, 83 percent of the suspended insured had already been hit previously by a certificate attesting insufficient assets. In other words the enforcement procedure had already verified a preceding inability to pay of these citizens.
Therefore, the picture that emerges is one of people who, as a result of unforeseen events (a personal or family crisis), lose control over their situation; one quarter of those suspended made use of mental health services in 2008. So they find themselves in a situation of insolvency which is difficult to remedy. Finally, the study indicates that the suspensions are lasting for the majority of the insolvent insured; 75 percent of the people suspended on 31st March 2009 had been in this situation for 18 months or more. In fact, it is rare that suspensions of longer duration are revoked due to the payment of the arrears by the debtors. If a family of four had not paid the premium for two years, the accumulated debt would be around 20,000 francs. Among the somewhat limited number of people readmitted to the system more than half were suspended for less than a year, and for approximately a quarter of the subjects it was not the first suspension. Readmissions are recorded among people who alternate short periods of non-payment with periods of payment.
As confirmed in the bill of Ticino's Council of State of 6th October 2009 [see ref. 10], the article introduced in 2006 did not manage to stem the phenomenon of the insolvent insured nor forestall the non-payment of premiums. The reason is that, without distinction, the measure has hit both opportunist subjects as well as people who, for various reasons, have a hard time managing their own situations and have found themselves saddled with burdens of solidarity concerning the sick and the elderly, which are heavier than their own economic resources enable them to bear. It must be taken into consideration that a model of community rating financing, with ex-post earmarked subsidies, transfers heavy burdens of solidarity onto the shoulders of insured with incomes only slightly above the subsidy threshold. Moreover, on average the health insurance premiums have doubled between 1996 and 2010, while the increase in subsidies paid to households with modest incomes was insufficient to neutralize the effects of this rise.
|Federal Council||sehr unterstützend||stark dagegen|
|Conference of cantonal health ministers||sehr unterstützend||stark dagegen|
|National Council||sehr unterstützend||stark dagegen|
|Council of States||sehr unterstützend||stark dagegen|
|Santesuisse (Health insurers' association)||sehr unterstützend||stark dagegen|
|left-wing||sehr unterstützend||stark dagegen|
|right wing||sehr unterstützend||stark dagegen|
The key points in the discussion concerned:
Since the Commission of the National Council considered the fundamental objective of the reform to be a reaffirmation of universal coverage in health insurance in Switzerland, it had preferred to refer to another seat the solution of the problem linked to those citizens who could per se pay but in fact do not take it on themselves to pay their premiums regularly. However, the plenum in the National Council decided to retrieve the proposal contained in a parliamentary initiative placed in March 2009 by right-wing exponents [see ref. 11], who suggested fixing in the federal law the model tested in Canton Thurgau regarding die-hard insured, that is citizens who persist in not paying health insurance although they have the means to.
In fact, the National Councillor who was the author of the initiative suggested including a new paragraph in the law reaffirming the principle of suspension of coverage limited to this category of insured [see ref. 12]. In this way the cantons would keep the power to decree the suspension of medical care, except for treatment of maximum urgency necessary to guarantee the survival of these citizens in case of illness. Not only: the cantons would also be granted the authority to fuel a database with the names of the so-called "black sheep" and to make this information accessible both to the providers of health care and to the municipal and cantonal authorities.
The second important change was proposed by a National Councilor who is on the scientific committee of a large sickness fund [see ref. 13] and during the debates the amendment was defended by the president himself of santésuisse (also a member of Parliament). In order to keep the incentive of the insurers intact so that they would undertake the necessary steps to collect the debts from the certificates attesting insufficient assets, the motion proposed abolishing the sickness funds' obligation to pay back the 50 percent of the amounts collected to the cantons. Both amendments were accepted by the majority of the National Council's deputies.
The ball passed into the court of the Council of States, which accepted the first proposal to suspend die-hard debtors and to draw up a black list but rejected the second (the opportunity for the insurers to keep 100 percent of the amount collected for the certificates attesting insufficient assets). After a further vote in both chambers, where parties kept to their own positions, in spring the arbitration chamber, a body for mediation, was called in. In the end it confirmed the original text , i.e. the obligation for the sickness funds to give back 50 percent of the credits collected to the cantons.
|Federal Council||sehr groß||kein|
|Conference of cantonal health ministers||sehr groß||kein|
|National Council||sehr groß||kein|
|Council of States||sehr groß||kein|
|Santesuisse (Health insurers' association)||sehr groß||kein|
|right wing||sehr groß||kein|
Without doubt the decision to amend article 64a in order to reaffirm the principle of universal coverage and to avoid the suspension of medical care cover for insolvent insured is superior from the symbolic point of view to the simple contractual solution which seemed to be appearing on the horizon in 2008. In fact, the federal law amendment institutes a legal obligation for the cantons (and not only a contractual restraint) toward those who do not manage to pay their premiums. If the economic inability of an insured is proven, it is the community of taxpayers, through the cantonal treasury, who are called on to pay for the invoices in arrears in order to guarantee that health insurance is also maintained for these fragile citizens. This decision represents an important admission of the failure of the social shock absorber set up by the FHIA. The present system of subsidies is not enough to make the cost of health insurance financially sustainable for all. Some citizens simply do not have the economic means to deal with this expense and therefore the obligation of the cantons to intervene in their support is recognized.
The power granted to the cantons to draw up a black list with the names of the insured who abdicate their own civic duties, despite having the means, and the resulting opportunity to suspend their insurance coverage, thus excluding them from the system, in fact opens the door to the scenario of quasi-universal coverage. The sanction, though comprehensible for the purpose of limiting the moral hazard problem, conveys an insidious and dangerous message. However, the social contract, which the regime of health insurance is based on, is brought into question by the presence of "bad" citizens, who free-ride and exit from the solidarity contribution embedded in the Swiss health insurance system.
Secondly, the law amendment is also a sign of victory of the health insurance industry, which has battled for some years for the health insurance subsidies to be paid directly to the insurers rather than to the citizens themselves. Many cantons have put up resistance for years, claiming that the information that a family benefits from a subsidy is confidential and sensitive; therefore the insurer should not be aware of it. From the point of view of the procedure of money collection it is certainly safer to pay the subsidies to the insurers, who, in this way, have only to invoice subsidized insured with a part of the premium. It should be noted that at administrative level the system might incur heavy transaction costs, if the different members of one family were not insured with the same sickness fund. At the same time the knowledge of the amount of the subsidy is sensitive information about the economic situation of the insured, data which might offer the health insurance industry indications that could make cream-skimming strategies even more successful than they already are today.
|Qualität||kaum Einfluss||starker Einfluss|
|Gerechtigkeit||System weniger gerecht||System gerechter|
|Kosteneffizienz||sehr gering||sehr hoch|
|The end of universal coverage has been averted|
Process Stages: Umsetzung
Luca Crivelli (proof reading by Mary Ries)