The government says it is against the idea of introducing a single health insurance company, claiming that it wouldn't tackle the problem of rising health costs.
Interior Minister Pascal Couchepin presented the government's position in Bern on Friday, attacking a plan put forward by centre-left political parties, and which will come to a nationwide vote in March.
The people's initiative wants to do away with the free choice of health insurers, and link premiums to income and personal wealth, bringing together more than 80 insurers under one roof over the next three years.
Couchepin argued that the initiative would not resolve the problem of soaring basic insurance costs.
"Quite the contrary," he warned. "[A single health insurance company] is a machine that will cause costs to mushroom."
Such a scheme would eliminate any kind of competition or need for innovation, he claimed. People would no longer be able to change insurance schemes if they were unhappy and any potential cost-saving options within schemes would be wiped out.
"It would be a form of upward harmonisation," he declared.
Under the plan, the single health insurance scheme would be managed by a tripartite group composed of health providers, the state and insurers.
Couchepin expressed doubt about the legitimacy of such a "heavy" administrative structure which would "prevent swift decision-making".
Deciding who exactly works out how much people have to pay for their health insurance would also be a major headache, he said, as it would be inconceivable for those in charge of the company – and difficult for parliament – to draw up figures.
He believes creating a premium calculated according to how much you earn is tantamount to introducing a new tax targeting mainly the middle classes.
Couchepin said the entire debate should be "brought back to the centre" and called for improvements to the health system rather than disruptions.
Supporters of the initiative, which was launched by a family association from western Switzerland, argue the system would be leaner, more transparent and cheaper.
They point out that the current system has created an administrative overhead which has contributed to spiralling healthcare costs in Switzerland.
Three years ago voters rejected by a three-to-one majority a proposal by the centre-left Social Democratic Party to introduce income and wealth-related health premiums.
The government line supports the position of a cross-party committee of parliamentarians who also argue that the initiative creates more problems than it can resolve.
The committee, made up of parliamentarians from the centre-right Radical Party and Christian Democratic Party, as well as the rightwing Swiss People's Party, warned in November that the standard of the health service might decline.
They said a single health insurance would create a two-tier system, where only well-off people could afford to pay for extra health coverage.
swissinfo with agencies
The initiative was launched by a family association from western Switzerland. It has the support of centre-left political parties, notably the Social Democrats.
The association collected just over 110,000 signatures to force a nationwide vote on a constitutional amendment. It is calling for a single state-run health insurance company funded by premiums which are based on health and personal wealth.
The government and parliament have come out against the proposal.
The vote is scheduled for March 11, 2007.