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Swiss health insurance companies are in fact for-profit, however by law
they cannot earn a profit on the basic health insurance policy. Where
they do earn (substantial) profits are in selling supplemental health
insurance policies, as well as in "cross-selling" other form of
insurance (life, liability, etc) .
What is essential about the Swiss approach is that these private
for-profit insurers are heavily regulated by the federal government, and
that it is this regulation that protects the public interest. For
example, Swiss health insurers cannot build a new building for
themselves without obtaining government permission - since a new
building will increase their cost basis.
In essence, the Swiss approach treats private health insurers as a
public utility - a model that many economists despise as cost-raising
and innovation-suppressing, but which seems to work reasonably well in
the Swiss political, geographic (26 quasi-independent cantons), and
historical context.
For the Swiss model to work in the US, there would have to be a dramatic
increase in regulatory interference from the federal government with the
day-to-day pricing, benefits, staffing, operational-infrastructure, and
of course profitability of US health insurers. This, combined with an
expansion of Medicaid to cover 100% of income eligibles, could go a
long way to combining the security, certainty, and cost stabilization
that the majority who have private insurance are demanding, with an
extension of coverage to many lower income citizens who currently lack
coverage.
Of course, both components of this strategy are highly controversial in
the US context, which is fundamentally different politically,
geographically, and institutionally. Much more importantly, both
componenets would be very expensive, at a time when state governments
(who pay 45% of Medicaid) are being forced to contract their current
services dramatically and the federal government is running
unprecedented, utterly unsustainable, currency-debasing deficits.
Please access the attached hyperlink for an important electronic communications disclaimer: http://www.lse.ac.uk/collections/secretariat/legal/disclaimer.htm
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