Swiss Insurance Actually Pretty Different

Contrary to what I wrote this morning, as Scott Lemieux points out the Swiss health care system is actually pretty different from what Max Baucus’ proposal would leave us with. Notably, according to this Commonwealth Fund report “In Switzerland, only nonprofit insurers may participate” in the market for mandatory basic insurance. There’s no public option, but there are no for-profit operators either.

Then on the other hand the system functions “with plans operating and setting premiums at the canton level.” Switzerland has about 7.6 million people in it—a bit smaller than Virginia—so canton-based risk-pools are going to be really tiny. The biggest canton, Zurich, has fewer people in it than Maine or New Hampshire. That means that the prospects for meaningful competition between insurers is much worse in Switzerland than it is in the United States. But the competition that does exist is between non-profits, not for-profit firms. Then to further muddy the waters, I believe that the Swiss basic coverage package is less generous than what Baucus has outlined. So in a number of directions, I don’t think this is a very good analogy except in the broad sense that Switzerland is the other example of a developed country that came late to the universal health care game thus did it in a way that involves a lot of compromises with existing interest groups.