Health Insurance Deductibles: Getting It Right

Choosing the right deductible for your Swiss mandatory health insurance can save you a lot of money. The size of the deductible is key. The higher the insurance deductible is, the less you will have to pay for your health insurance. But there is another side to the coin: The higher your deductible is, the more of your healthcare costs you will have to pay for yourself.

What is an insurance deductible?

The health insurance deductible is the part of your medical expenses that you will have to pay yourself before the health insurance takes over. The health insurance only applies to the part of your covered healthcare costs over the course of a year that exceeds your insurance deductible.

For adults aged 18 and over, the lowest possible deductible is 300 francs. The lowest possible deductible for children is zero francs, and this deductible is the most widely used.

Many people confuse the insurance deductible with the coinsurance payment. Both the deductible and coinsurance determine which part of your medical bills you have to pay out of your own pocket.

The deductible comes into play first, as you have to pay all your medical bills yourself until that limit is reached. Any costs that exceed your deductible are covered by your health insurance, but you still have to pay a small part of each bill yourself. This coinsurance, as it is known, is equal to 10 percent of each bill. The total amount you have to pay as coinsurance is limited to 700 francs per calendar year.

Example of how the deductible and coinsurance work in Swiss mandatory health insurance: An adult with a 2500-franc deductible for their mandatory health insurance incurs 5500 francs of medical bills. The person would first have to pay 2500 francs of that amount themselves (the insurance deductible). Of the remaining 3000 francs, their health insurance would cover 90 percent. They would have to cover 10 percent themselves (the coinsurance), which would come to 300 francs in this case. So the person would end up paying 2800 francs out of their own pocket, while their insurance would cover 2700 francs. These out-of-pocket costs are in addition to the premiums that the person pays for the health insurance.

Which deductibles can I choose from?

All Swiss mandatory health insurance providers are required to offer the base deductibles of 300 francs for adults and zero francs for children. But insurers are free to offer additional deductible models, and they can decide themselves which other deductible options they want to offer.

If insurance providers choose to offer other deductible choices in addition to the base deductibles, they must offer these in keeping with insurance requirements. What that means is, all of their customers that use a certain deductible model must cover their own costs. The insurance company cannot use money from one deductible group to finance benefits paid out to a different deductible group. The federal government also stipulates that the discounts offered to customers who choose higher deductibles cannot be higher than 70 percent of the risk covered by the base deductible. That means mandatory health insurance with a 2500-franc deductible can only be 1540 francs cheaper – at the most – than the same insurance, but with a 300-franc deductible.

The table below shows the deductible models that may be offered for Swiss mandatory health insurance.

Data from the Federal Office for Public Health shows that around one out of five adults choose a deductible that is neither the lowest possible deductible (300 francs) nor the highest possible deductible (2500 francs). The data shows that intermediate deductibles are still popular even though using them does not make sense, from a financial perspective.

The most popular deductibles are the base deductible (300 francs), which is used by 45 percent of adults, and the highest possible deductible (2500 francs), which is used by 36 percent of adults.

The most popular deductible for children is clearly the base deductible (zero francs), which is used for 94 percent of children in Switzerland.

Which deductible makes sense for me?

There are only two mandatory health insurance deductibles that can make sense for adults: The lowest deductible of 300 francs, and the highest deductible of 2500 francs. Analyses by moneyland.ch show that all other deductible models do not pay off, in spite of the discounts they bring.

Relevant criteria for choosing a deductible are:

• Your personal health: The most important criterion is the amount of medical expenses you will incur. The higher your anticipated healthcare costs are, the more likely you are to save money by using a 300-franc deductible.
• Your emergency fund: If you opt for a high deductible, you need to have enough money set aside to cover medical expenses that fall below the limit of the insurance deductible.
• Risk tolerance: Are you willing to accept part of the risk yourself and to cover a larger part of your healthcare costs if you ever require medical treatment.

If you are healthy and hardly require medical attention, then it can make financial sense to choose the highest possible deductible and place the money saved on premiums in a fund. In the event that you do end up needing medical care, you can use money from the fund to pay medical bills until your deductible is covered.

For children, using a zero-franc deductible is often preferable, although insurers do offer deductibles as high as 600 francs. Children often require more medical attention, and the differences in premiums between the lowest and highest premium models are relatively small.

More information:
Compare Swiss mandatory health insurance offers now
How can I terminate my Swiss mandatory health insurance
Changing Swiss mandatory health insurance mid-year
Health insurance deductible calculator