Each year, health insurance providers have their premiums approved by the Federal Office of Public Health (FOPH). Their calculations are based on anticipated costs of healthcare in the individual cantons. On behalf of the Federal Council, the Federal Office of Public Health checks whether or not these premiums are reasonable. Given the large number of unknown factors, such as how costs will develop in future, a degree of uncertainty is always involved in calculating premiums. Insurers create provisions and reserves to even out any deficits and to prevent fluctuations in premiums.
By law, health insurance providers are not permitted to make any profit on mandatory healthcare insurance. Premiums may be used only to pay benefits. This means that premium funds remain within the system in the form of reserves. The law does not make any provision for these reserves to be distributed between the cantons, or for any maximum reserve ratio.
This creation of reserves at the national level means that, for some cantons, premium revenues and healthcare costs under basic insurance have been out of balance since 1996. Although the variation in relation to total premiums is marginal, some cantons have insisted on compensation for these differences.
The political process
Despite criticism from health insurance providers, political parties and the majority of the cantons, the Swiss parliament was presented with a bill from the Federal Department of Home Affairs (FDHA) which proposed the correction of premiums paid between 1996 and 2013 (Art. 106 of the Federal Health Insurance Act (KVG)). Following a counterproposal, and a decision not to consider the first draft of the bill, in February 2013 the FDHA presented a new draft bill, which was ultimately passed by both chambers of parliament in the spring of 2014. The corresponding implementing ordinance enters into force on 1 January 2015.