Rising MHI premiums represent financial burden for households
In Switzerland, mandatory health insurance (MHI) premiums under the Federal Health Insurance Law (KVG/LAMal) are community-rated within each canton and insurer rather than linked to individual income. To support low-income households, the Confederation and cantons provide premium subsidies. While the federal contribution is legally defined as a percentage of premium revenue in each canton, cantonal contributions have largely been discretionary within broad federal parameters. Over the last decade, rising healthcare expenditure has led to sustained premium increases, with significant variation across cantons. In several cantons, subsidy budgets did not keep pace with premium growth, widening inter-cantonal differences in generosity and eligibility. As a result, a greater financial burden has shifted onto households, particularly those with low and middle incomes, and intensified debate about affordability and fairness.
The premium relief initiative was rejected, prompting an indirect counter proposal
In January 2020, the Socialist Party launched the Premium Relief Initiative, proposing that households should not spend more than 10% of their disposable income on MHI premiums, with public subsidies covering the difference. The proposal gained attention amid sustained premium increases but was criticized by the Federal Council and Parliament as fiscally costly and weakly linked to cost containment. The initiative was rejected in a popular vote in June 2024, with 55.5% voting against it. Nevertheless, the campaign highlighted concerns about affordability and disparities in cantonal subsidy schemes. Following the rejection, a legally binding indirect counter-proposal, adopted by Parliament in September 2023, entered into force.
Cantons responsibility for premium subsidies strengthened
The indirect counter-proposal aims to strengthen and partially harmonize the premium reduction system without introducing a national income cap. By setting minimum legal requirements for cantonal contributions, it seeks to reduce inter-cantonal disparities, enhance transparency, and ensure a baseline level of protection against excessive premium burdens, while preserving cantonal autonomy and the existing federal financing framework.
As of 1 January 2026, cantons must contribute a minimum annual share to premium subsidies. This minimum is based on the average premium burden of the 40% of insured persons with the lowest incomes in the canton. If premiums account for less than 11% of their income, the minimum contribution is 3.5% of gross premium revenue; if the burden reaches 18.5% or more, it increases to 7.5%, with a linear progression between these thresholds. This establishes a binding financing floor linked to premium developments and limits cantonal discretion. Within four years, cantons must also define a maximum share of disposable income that premiums may represent. Although not fixed at the federal level, this requirement strengthens accountability and promotes greater consistency. The transition period allows flexibility but may require political negotiation in fiscally constrained cantons.
The reform is expected to reduce disparities and provide more predictable support for households facing high premium burdens, though it may increase fiscal pressure on cantons and does not directly address underlying cost growth.