Affordable Care Act Adapts the Worst of Swisscare, Rejects the Best

September 7, 2012

President Obama's health care reform package (the Affordable Care Act, or ACA) shares some elements of Switzerland's system, Santésuisse. Unfortunately, the ACA rejects the best ideas the Swiss have to offer, and adopts the worst, says Sally C. Pipes, president and chief executive officer of the Pacific Research Institute.

The chief similarity between ACA and Santésuisse is the individual coverage mandate. The mandate is reasonably popular in Switzerland. More than half the Swiss public supports the country's health care system. That's partly a function of the country's cultural aversion to risk.

Liberal health wonks cite the Swiss experience as evidence that ACA will work similar marvels. But Switzerland's achievements are less noteworthy than advertised.

  • For starters, 96 percent of Swiss had insurance before the installation of Santésuisse in 1996, so the country's health care overhaul upped the coverage rate by a whopping 3 percent.
  • Further, Switzerland has not yet figured out how to control health care costs.

According to researchers Ewout van Ginneken and Katherine Swartz, Switzerland has had trouble enforcing its mandate.

  • It's tried to fight noncompliance by levying penalties of up to 50 percent on top of the premium on the uninsured.
  • Swiss folks who lie about their health coverage can actually go to prison.

The United States will face even more difficulty enforcing its mandate -- and therefore won't come close to matching Switzerland's rate of coverage.

If there's one aspect of Switzerland's health care system that ACA should've borrowed, it's the decoupling of health insurance from employment.

  • The Swiss are free to pursue whatever line of work best suits their talents and interests -- rather than settling for a job simply because of the health benefits.
  • Further, by assigning individuals responsibility for securing their own health insurance, the Swiss system demands that its citizens be cost-conscious.

The United States could disentangle insurance from employment -- à la the Swiss system -- by offering individuals the same opportunity to purchase coverage with pretax dollars that businesses currently enjoy. Such a move would inject more competition into the insurance marketplace -- and force consumers to be more judicious with their health care dollars.

Source: Sally C. Pipes, "ACA Adapts the Worst of Swisscare, Rejects the Best," Forbes, September 4, 2012.

 

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