Swiss healthcare costs rise faster than patients can keep up

In 2024, average monthly premiums for an adult were CHF423, about 7% of average disposable incomes, up from 4% in 2004. Keystone / Christian Beutler

As Switzerland’s mandatory health insurance turns 30, an affordability crisis is forcing the country to take some difficult decisions to secure its future. 

Key Takeaways

• Switzerland’s mandatory health insurance premiums reached CHF423 ($470) monthly in 2024 – 7% of disposable income, up from 4% in 2004.
• Parliament approved 16 cost-containment measures in March 2025, but a referendum capping premiums at 10% of household income was rejected by voters.
• University of Basel professor Stefan Felder warns the system is “just too expensive,” with the KOF Swiss Economic Institute projecting 3.9% annual cost growth through 2027.

Since its launch in 1996, Switzerland’s universal health insurance system, LAMal, has delivered high-quality care and one of the world’s longest life expectancies. But rising costs are straining the system and challenging its principle of solidarity. 

While other EU countries face health cost issues, Switzerland’s challenges are unique due to its population-financed system and the pharmaceutical industry’s significant economic contribution.  

“We always thought we’d be able to afford a top-notch health system, but we are realising we are facing a trilemma,” Helene Budliger Artieda, state secretary for economic affairs, told reporters in January. She cited pressure from affordability for the public, accessibility of new treatments, and pharmaceutical industry profitability.

Healthcare is expensive, even by Swiss standards 

A main challenge for LAMal’s sustainability is rising costs. Many countries fund health systems through taxation and social security, making cost increases less visible. But Switzerland’s system is financed by monthly premiums and out-of-pocket fees from residents. Insurance is mandatory, with state subsidies for citizens in need.

“If you want good healthcare, you have to pay for it. It’s a trade off,” said Stefan Felder, professor of health economics at the University of Basel. “Even so, we have to face it, [the Swiss system is] just too expensive. This can’t go on forever, too much is included in the basic health system.” 

The Swiss government spent roughly 12% of GDP on healthcare in 2024 – the fourth-highest in the Organisation for Economic Co-operation and Development (OECD) – and the bill is only likely to keep rising. The KOF Swiss Economic Institute estimatesExternal link annual health costs will climb by an average 3.9% from 2024 to 2027, up from 3.1% in 2014-2023. 

Some experts attribute rising costs to increased chronic diseases, especially among the elderly, and over-utilisation of elective surgeries like back operations, knee and hip replacements. Switzerland and Germany report high figures, with about 350 hip replacements per 100,000 people, well above the OECD average of 191. Some experts argue these surgeries aren’t sufficiently beneficial to the patient to justify health coverage by insurance.

Others point to new drugs and treatments, such as gene therapies and biologics, priced far higher than traditional medicines. Clinical tests that once cost CHF40,000 now cost CHF400,000, according to Thierry Mauvernay, CEO of Swiss biotech Debiopharm. Although LAMal spends about 22% of its budget on drugs – a percentage that has varied only slightly over the last 20 years – the overall cost of reimbursed drugs has doubled over the past decade. 

Voters reject premium caps  

Higher costs are reflected in citizen premiums. In 2024, average monthly premiums for an adult were CHF423, about 7% of average disposable incomes, up from 4% in 2004, according to data citedExternal link by a Bern University of Applied Sciences scholar. The Worry Barometer survey published by investment bank UBSExternal link found that premiums topped Swiss residents’ concerns in 2025, and a University of Fribourg study foundExternal link one in five older adults forgo care for financial reasons. 

A 2025 survey commissioned by comparis.ch, a Swiss online comparison service, found 59% of respondents had no problem paying mandatory premiums, but a third received state subsidies. 

Despite complaints, proposals to cap premiums have been rejected by voters over concerns any change would make care less accessible and reduce its quality. A June 2024 people’s initiative to limit premiums to 10% of household income failed. 

With system finances under pressure, the government began a national cost containment package in January 2022. Phase one includes sending invoice copies to patients, simplifying imported drug packaging, and encouraging generics by doubling co-payment for some brand-name drugs from 20% to 40%, while keeping generics at 10%. 

The second phase covers 16 measures approved by parliament in March 2025. Key changes include overhauling drug pricing, requiring manufacturers to repay a portion of revenue to the health system when sales of some expensive drugs reach a certain volume. Reimbursement criteria for LAMal have also been revised including the temporary reimbursement of approved drugs that are awaiting final price setting by the Federal Office of Public Health (FOPH). 

The government also works with cantons, patient groups, doctors, insurers, pharmacies, and experts on voluntary cost-cutting measures. This round table, set up in November 2024 by Federal Councillor Elisabeth Baume Schneider targets CHF300 million in annual savings from 2026. Measures include reducing B12 vitamin and hormone tests for thyroid problems, more selective shoulder surgery, greater uptake of generics and biosimilars, and shifting inpatient intake to outpatient care. The savings, equivalent to 1% of the money collected from premiums and less than 0.25% of the annual health budget of nearly CHF100 billion, have been derided by Felder as ridiculously small.

In November 2024, a referendum approved a reform to standardise medical cost splitting between insurers and cantons, removing incentives for hospitalisations. A new medical billing structure introduced in January 2026, also aims at removing certain financial incentives for doctors, like multiplying visits for a same treatment, and making billing easier.

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The Federal Council is looking into setting caps on annual health budget growth for 2028-2031 while also finalising a plan to raise the minimum annual insurance deductible to CHF400 from CHF300, the first increase in two decades. 

As it attempts to control rising costs, Switzerland is trying to strike a balance between maintaining the principle of solidarity while at the same time pushing individuals not to use the system unnecessarily. 

Switzerland’s health system is very Swiss, in the way that it tries to do compromises between two different health models, said Samia Hurst-Majno, a physician bioethicist at the University of Geneva and former vice-chair of the Swiss COVID19 Science Task Force. 

“One approach is the solidarity model, which relies on coverage for all, and the other one is the private market approach, which puts responsibility on each person for their spending,” she said. 

The Trump factor 

Switzerland has another key group to consider in its overall strategy: pharmaceutical companies. The industry represents 40% of Switzerland’s exports and contributed 10% of the country’s gross value added in 2022, government data show. But tensions are growing as the industry pushes back against state efforts to lower drug prices. 

Roche, the largest Swiss pharma company by sales, set a precedent in 2025 by pulling its cancer treatment, Lunsumio, from the Swiss market after pricing negotiations with the FOPH collapsed.  

Switzerland’s small population of 9 million also limits its leverage. “Switzerland has a small market, so if we tell a company we don’t accept their prices, they have relatively little incentive to lower their price and gain access to our market,” said Hurst-Majno. 

President Donald Trump’s decision last year to increase import tariffs on drugs and force pharmaceutical companies to boost US investments has added pressure on the FOPH to raise drug prices.  

>>The global pharma industry faced significant political challenges in 2025. Here’s a recap:

The Swiss government set up a high-level working groupExternal link for the life sciences industry in January 2026, including senior executives from Roche and Novartis. There has been no official public announcement about the group’s work so far and the FOPH did not respond to Swissinfo’s request for more details. However, media reports suggest the aim is to coordinate with leaders about the industry’s future – including the impact of US tariffs, investment commitments and longer-term competitiveness – in response to Trump’s new policies. 

>>How US policies threaten to push drug prices higher in Switzerland

“The health system works well. People trust and value the quality and safety of care,” Baume Schneider said in an interview with RTS in October 2025. 

 “The real issue is who pays for what, and that is a discussion we need to take place in parliament –  as we do on economic measures – and with the cantons,” she said. “But it would be wrong to say we are about to launch a huge reform, because no one wants to jeopardise the safety and quality of care.” 

Edited by Nerys Avery/vm/ds