https://www.linkedin.com/pulse/barring-profits-basic-coverage-switzerland-keeps-robqc

Roughly two-thirds of the U.S. population has health coverage through private insurance companies. Despite paying about $1,600 a year out of pocket on deductibles, copayments, and coinsurance, Americans have no guarantee their insurer will cover the cost of their care. Because insurance companies in the United States seek to maximize their profits, they have an incentive to deny payment for some services, even for recommended care, and to raise monthly premiums and out-of-pocket costs.

Switzerland has also struggled to make health care affordable for all residents, with one of the highest levels of out-of-pocket spending per person in the world, comparable to the U.S. average. Like the U.S., it relies largely on private health insurance, with residents choosing among competing insurers. But unlike the U.S., Switzerland bars insurers from profiting off basic plans. That difference helps explain why nearly a third of the U.S. population has medical bills or debt they are paying off over time, while only 2 percent of the Swiss population reports the same problem.

Regulating Private Insurers in Switzerland

Switzerland’s current system of mandatory basic health insurance (obligatorische Krankenpflegeversicherung, or OKP) was established in 1996 and requires all residents to purchase health insurance from authorized private insurers. Today, 100 percent of the population is covered through OKP, and everyone has access to the same nationally defined baseline benefits package, regardless of insurer. Because everyone is enrolled, costs are spread out across healthier residents and those who need more costly care.

Premiums are set by insurers but subject to federal approval. All plans include a minimum annual deductible of CHF 300 (USD 340), 10 percent coinsurance capped at CHF 700 (USD 794) annually, and a daily hospital fee; adults can choose plans with deductibles up to CHF 2,500 (USD 2,835) in exchange for lower premiums. The Swiss government also caps the price of services and what insurers pay providers to control costs.

While the federal government sets these baseline standards, it does not sell insurance directly. Residents choose among private insurers based on premiums, deductibles, provider restrictions, and networks, while guaranteed a core set of protections. Those who don’t enroll are assigned a plan by their local government and are responsible for late fees and past-due bills.

The most fundamental feature of the Swiss insurance market is that insurers are prohibited from earning a profit on basic health plans and must use a community-rating premium structure that shares costs between sicker and healthier individuals. Any surplus collected from basic premiums that exceeds paid claims must either be held in reserve to cover future costs or be returned to policyholders. Insurers also cannot deny coverage for any medically necessary care included in the basic package.

Insurance companies can, however, profit from supplementary private insurance, which covers services such as dental care and private or semiprivate hospital rooms. For these plans, insurers can reject applicants and vary premiums based on health status, age, and sex.

Despite federal regulations, affordability remains a major hurdle in the Swiss health system. Out-of-pocket spending is among the highest in the world, and premiums, which do not vary with income, can burden families who do not qualify for subsidies. Still, the system rests on a strong commitment to social solidarity, and some Swiss see these costs as the price of insuring everyone, even the most vulnerable. Because deductibles and coinsurance on basic plans are capped each year and claims for covered care cannot be refused, few residents fall into medical debt.

America’s Underregulated Private Insurance Market

The U.S. private insurance market is not entirely unregulated: the 2010 Affordable Care Act (ACA) prohibits insurers from denying enrollment based on preexisting conditions, age, or sex. The ACA also requires plans to cover essential health benefits and cap out-of-pocket spending, and it provides income-based subsidies for coverage bought through the marketplaces.

Since private insurers are permitted to operate for profit, they still have an incentive to limit what they pay out to maximize their earnings. While people cannot be denied enrollment, insurers can delay payment for doctor-recommended services or deny claims altogether by arguing the care was not medically necessary or by citing other technicalities.

In 2025, one in five U.S. working-age adults with private insurance said they or a family member had been denied treatment their doctor recommended in the past year, and about 40 percent of them said the denial led to delayed care. More than two in five adults whose claim was denied reported it led to medical debt they are still paying off. In one survey, most working-age adults with private coverage who were paying off medical bills or debt blamed insurance companies.

While both Switzerland and the United States have an individual mandate requiring residents to enroll in a health plan — which is necessary for maintaining balanced risk pools — enforcement differs greatly. Since 2019, the ACA’s federal tax penalty for going without coverage has been reduced to $0, and only four states and Washington, D.C., impose their own financial penalties.

In both countries, a person’s insurer, out-of-pocket spending, and provider networks vary widely. But while federal regulation in Switzerland ensures all residents have robust minimum coverage standards, without fear of insurers creating obstacles to care in pursuit of their own profit, American patients have far fewer protections against companies that refuse or stall payment for care.

As the midterm elections approach, politicians are debating healthcare within the broader context of “affordability,” or, more precisely, the challenge voters say they are facing in paying their regular bills. An interesting battle within the Democratic Party is underway over the appropriate response to this concern, with some favoring Medicare for All and others voicing skepticism about that approach.

Leading congressional Democrats, including Sen. Ron Wyden of the Finance Committee, are hedging their bets, but the most likely scenario is still one of incrementalism rather than sweeping reform.

Medicare for All has always been more effective as a rallying cry for the Democratic Party than as a roadmap for getting a bill through Congress. Although many voters are exasperated with the state of American healthcare, support for Medicare for All falls when its costs, which are considerable, are made clear to survey respondents. There is also a broad lack of confidence in the government’s ability to competently manage healthcare insurance for the entire country.

A potential guide for what Democrats might do in lieu of Medicare for All can be found in a document posted in July by Wyden on behalf of many of his Senate colleagues. It lists scores of ideas for reforming healthcare insurance and care delivery, including through the possible adoption of Medicare for All, although the balance of the paper points toward more public control and regulation than a major push for a monolithic public plan.

Wyden is following the playbook Democrats used to successfully advance the Affordable Care Act (ACA) from 2008 to 2010. In the months leading up to the 2008 election, then-Senate Finance Committee Chairman Max Baucus had worked with outside experts and fellow Democrats to draft a white paper on healthcare, which he released just days after then-Sen. Barack Obama won the presidency. That document would serve as the blueprint for the bill Baucus would draft and pass in the Senate in 2009, which later became the foundational ACA law.

Many healthcare concepts that are now familiar because of their inclusion in the ACA were promoted in the Baucus white paper, including the individual mandate, new premium subsidies for non-employer coverage for individuals with incomes below 400 percent of the federal poverty line, a large Medicaid expansion, and accountable care organizations, which are provider-led—as opposed to insurer-owned—managed care plans.

Wyden is explicit in his July release that he views the development work conducted by Baucus before 2009 as a model for what he hopes to accomplish in the run-up to 2029. However, he framed the ideas presented in the July release not as proposals he supports but as ideas for which he is soliciting feedback (responses to his “request for information” are due by October 2). It is possible, depending on what occurs in November 2028, that Wyden will publish a more prescriptive plan after the election to signal more clearly his intentions for 2029.

Wyden’s document zeroes in on consumer dissatisfaction with aspects of private insurance and divides the ideas under review into three categories: lowering costs for consumers and making enrolling in insurance easier, removing barriers to accessing care and lowering administrative costs, and regulating the for-profit companies providing insurance and care to patients.

Some of the more noteworthy concepts included in the document include:

• reversing most of the budget cuts and regulatory changes implemented during the second Trump administration
• developing transition plans that might allow Medicare for All to be approved with less immediate disruption to the current coverage of many Americans
• creating an option for states to offer single-payer coverage
• creating a nationwide “public option,” sponsored and run by the federal government, that would be offered to consumers buying individual coverage through the exchanges established by ACA and which might use Medicare’s regulations to set reimbursement rates for services or allow the government to negotiate rates with the providers of services in each market

• developing new Medicare or Medicaid “buy-in” options that could be offered to all Americans regardless of their employment status and incomes
• creating a single online entry point for enrolling in coverage that both those getting employer-sponsored and non-group coverage could use
• allowing states to add to essential health benefits based on emerging evidence of effective services

• stricter state oversight over premium increases requested by insurance plans, potentially including caps
• eliminating deductibles and coinsurance for some “non-shoppable” services, and applying lower limits on total annual out-of-pocket costs based on a person’s income
• reinstating the enhanced premium credits in place from 2021 to 2025 that the GOP Congress allowed to expire
• allowing the ACA premium credits to go to lower-income workers enrolled in employer coverage, which the current “firewall” prohibits and which might be provided irrespective of the share of the premium paid by workers, and
• restricting the business practices of for-profit companies participating in the healthcare industry, including insurance companies, private equity investors, and other “middlemen”

The connecting theme behind these ideas is a publicly regulated system, with the government taking on the responsibility of providing affordable coverage options for all Americans, with cost-sharing that is capped relative to household income. Wyden and other Democrats are willing to consider all manner of new controls and subsidies to ensure these objectives are achieved, but it is of course easier to promise these outcomes than to deliver them. An especially formidable obstacle is likely to be the service providers who believe Medicare and Medicaid’s payment rates are too low to serve as guides for private coverage too. Cutting payments to all providers is easier than designing reforms that more precisely target waste and inefficiency, but the ability of Democrats to overcome industry opposition to payment reductions in 2029, as they did when writing the ACA, is not assured.

In addition, even with some provider cuts, the aggregate federal cost of a plan that includes some of the more prominent ideas in the Wyden plan (not including Medicare for All), could be significant. For instance, the Congressional Budget Office has estimated that rolling back policies that tightened administration of the ACA credits, along with reinstating on a permanent basis the enhancement of the credits originally approved in 2021, would increase projected federal budget deficits by $662 billion over 10 years. Democrats are certain to favor tax hikes on well-to-do Americans in 2028, but it is not yet clear that those potential sources of new revenue would be sufficient to fully offset the most expensive ideas the Wyden document teases.

The heavy investment Senate Democrats are making in the development of their 2029 agenda for healthcare contrasts with the GOP’s approach, which is less focused. The Trump administration released a one-page framework earlier this year (“The Great Healthcare Plan”), but there has been little follow-up and no visible movement among congressional Republicans to approve new legislation.

Republicans should take the Wyden document seriously. If voters opt once again for change in 2028 rather than continuity, it is near certain Democrats will use the power voters granted them to prioritize passage of a major healthcare bill. The GOP could make that scenario less likely to occur if it developed, promoted, and tried to advance an alternative approach. There are multiple sound ideas they could embrace to make healthcare more affordable without excessive reliance on public regulation, such as by allowing consumers to keep the savings when they choose lower-cost insurance and care providers. Refining those ideas and putting them into legislation would put the party in a better position to compete with what is coming from their opponents in both 2026 and 2028.