The Swiss and Dutch Health Insurance Systems: Universal Coverage and Regulated Competitive Insurance Markets

By Robert E. Leu, Frans F. H. Rutten, Werner Brouwer, Pius Matter, and Christian Rütschi
The Commonwealth Fund
January 2009

Universal coverage attained through a mandate that every individual purchase a basic insurance plan

Building on a previous system of social and private insurance, the individual mandate in the Netherlands took effect in 2006. The Swiss have operated with a mandate since 1996. In both countries uninsured rates are low (estimated at about 1.5 percent of the population in the Netherlands and below 1 percent in Switzerland).

Enforcement of mandatory health insurance


On the other hand, some people who are nominally covered are not paying their premiums. Since 2005, insurers have been permitted to suspend payments on behalf of such people, meaning that providers are left with unpaid bills or consumers are denied services. These suspensions can last 8 to 24 months, because of the time it can take to ascertain whether a consumer is unable to pay the premium (in which case cantons or communities will often assume financial responsibility) or is simply unwilling to pay. About 120,000 people, or 1.6 percent of the population, were affected by suspensions in 2006.


Before the new Health Insurance Act, there was a fear that, despite the mandate, many individuals would opt not to obtain coverage. In fact, the number of uninsured at the end of 2006 was about the same as before the new mandate took effect — 241,000 people, or 1.5 percent of the population.

Almost an equal number of people — 240,000 as of the end of 2007 — were enrolled with an insurer but were not paying their premiums. Beginning July 1, 2007, insurers were allowed to expel enrollees who have not paid premiums, but these enrollees simply switched to other insurers and failed to pay them as well. To prevent this, the government has forbidden people from switching plans when they are behind in paying their premiums. There is also a proposal to allow garnishing of wages or unemployment or disability benefits.

The Commonwealth Fund is joining the chorus of those who say that we should look to the Swiss and Dutch systems as potential models for universal coverage in the United States. What is meant by universal coverage? It means that everyone is covered (except for the one percent or so who are not, and the one and one-half percent who have been suspended for failure to pay their premiums).

If we were to adopt a “universal” program that left about two and one-half percent without coverage, that means that about 7.5 million U.S. residents would be left out. The population of Switzerland just happens to be 7.5 million. Does anyone else see any irony in adopting a Swiss-like insurance system that would leave out the equivalent of the entire population of Switzerland? Perhaps some might argue that the Swiss population is more worthy of coverage than would be the 7.5 million that we would leave out.

This report is very supportive of the private insurance industry. The lead author, Robert E. Leu, Ph.D., serves as a director on the board of the largest private hospital group and a large health insurance company in Switzerland. Rate of coverage is only one of the many policy issues covered in a favorable light in this report. Those who have been following our national dialogue on health policy will recognize many other sections in this report that seem to be more intent on marketing their model to the United States than to caution us against the deficiencies in their systems.

Their faith in the social value of the private insurance industry is certainly noteworthy. For instance, when discussing the Swiss nonprofit plans for basic coverage, and for-profit plans for supplemental coverage, they state, “There may be synergies between the two lines — for example, in provider relations — and some insurers may use health information from basic coverage when deciding to whom to offer supplementary insurance (this is illegal but difficult to control).” Does isolating this statement parenthetically sterilize it, making it a fundamental business principle?

Private insurers, whether for-profit or nonprofit, are businesses. They will always advance innovations that enhance their business models. No matter how tightly they are regulated, they will engage in activities that are “illegal but difficult to control.” Of course, since not every potential loophole could possibly be covered by laws and regulations, some of the innovative, immoral business behaviors technically might not be illegal, even though they should be.

In a single payer public health program, everyone is covered for life, automatically, including the 7.5 million deemed less worthy (?) than all of the citizens of Switzerland. Not only that, we would also remove from our midst an expensive, superfluous industry that thrives on immoral or illegal (but difficult to control) business practices. Now really, isn’t single payer a better model for the United States?