Rising healthcare costs are likely to lead to further premium increases

Healthcare costs continue to grow. After an increase of 2.6 percent in 2022, there was an increase of 7 percent in the first quarter of 2023. This is bad news for policyholders: premiums are also likely to increase by 2024.

That was the conclusion of a media conversation by the Bundesamt für Volksgezondheid (BAG) on Thursday in Bern. “The premiums follow the costs. Rising costs will also lead to rising premiums,” said Thomas Christen, deputy director of BAG.

Although it is still too early to draw concrete conclusions for the next round of premiums. There are, however, various indications that premiums will continue to rise.

In recent years, the insurers could have slowed down the premium increase with existing reserves, according to Christen. This will hardly be possible now. “There’s no room for kissing anymore.”

The reason for this, according to the BAG, is that health insurers had to fall back on the reserves due to the high losses last year. There are currently CHF 8.5 billion in reserves, Christen said. That’s okay, but the pillow is gone.

Healthcare costs rose by 2.6 percent in 2022 compared to the previous year, slightly more than expected by the Economic Research Center (KOF), but were average in recent years, the BAG further announces. According to the BAG, costs have increased by 3.4 percent in the past twelve months. Compared to the first quarter of 2022, there was an increase of about 7 percent between January and March 2023.

The analysis of gross benefits per insured person shows that in 2022 there was an above-average increase in laboratory analyzes by doctors, outpatient hospital admissions, pharmacies, medicines, nursing homes, physiotherapists and home care organizations.

One reason for the increase in costs is still the corona crisis. The pandemic-related healthcare costs for health insurers last year amounted to about 450 million francs, about three-quarters of which are attributable to the inpatient treatment of Covid 19 patients, according to the federal evaluation.

It is also striking that due to the average premium increase of over 6 percent announced last year, about twice as many people as normal changed health insurer, according to Christen. Due to the increase in the deductible and the voluntary restriction of the choice of service provider, the increase in premiums in the current year is likely to be slightly less than expected in real terms.

This reduces the income of health insurers. As costs continue to rise, a “slight catch-up” can be expected, according to the BAG.

Politicians have been trying for years to combat rising healthcare costs. Part of the cost increase can be explained by demographic developments and medical progress. However, there is also a medically unjustified part of the increase.

In recent years, the federal government has reduced lab fees and continues to review drug prices on a regular basis. Various other austerity measures are being discussed in the House of Representatives, such as binding cost targets and expansion of premium discounts.

Curbing health care costs remains an ongoing task, Christen said. When a journalist noted that politics had failed in this area for a long time, Christen said he did not view the situation as negative. But it’s important to persevere. (oo/sda)