Capital gains should keep easing health premiums voluntarily
The Federal Council considers the voluntary system sufficient, under which health insurers can use capital returns for premiums. That creates flexibility – but no binding premium guarantee for individual insured persons.
Can health insurers pass on strong investment returns directly to premium payers? Yes – under certain conditions. The Federal Council, however, insists that insurers should decide for themselves whether and to what extent they use capital returns to ease premiums in compulsory basic health insurance. It rejects a new obligation.
The question sounds technical, but it touches a sensitive issue: premiums hit households immediately, while returns on capital investments fluctuate from year to year. Anyone who simply offsets the two against each other overlooks the function of reserves. They are meant to prevent an insurer from being unable to meet its obligations towards the insured after a bad investment year or an unexpectedly sharp rise in costs.
What is possible today
Health insurers may, under certain conditions, use a share of their capital returns to lower or dampen premiums. According to the Federal Council's assessment, most insurers use this option when their financial situation allows it. The rule is voluntary: an insurer does not have to distribute capital returns automatically and can also use them to strengthen its financial stability.
That is no free pass for arbitrary decisions. Social health insurance is supervised; insurers must comply with statutory requirements on financing, premiums and solvency. Before reserves are reduced or returns used to ease premiums, what matters is whether long-term solvency is preserved. What looks like an attractive reduction in the short term can later lead to sharper premium swings if capital markets or health care costs develop unfavourably.
Why the Federal Council does not want an obligation
A mandatory distribution would sharply limit insurers' room for discretion. The Federal Council argues that the existing model makes it possible to use capital returns for premiums when solvency permits. At the same time, it says, there remains scope to cushion fluctuations and manage reserves appropriately.
This objection is not merely an actuarial one. Capital returns can be positive, but in other years they may be lower or turn into losses. If good years automatically had to lead to low premiums, this could create the expectation that any subsequent reversal is the insurer's fault. In fact, premiums are determined primarily by the expected costs of medical services. Investment returns can influence them, but they do not replace cost control in the health care system.
An obligation could also have differing effects, because insurers do not start from the same position. They have different insured populations, cost trends and reserve situations. A uniform requirement would therefore not automatically produce equally large relief for everyone.
What the insured can take from this
The Federal Council's decision does not mean that every insured person can now expect a noticeable reduction. Whether and how capital returns flow into premiums is decided at the level of the individual insurer and depends on its financial situation. Even a lower premium in one year would not necessarily be permanent.
For the insured, comparing premiums remains important. The focus should not be only on a short-term discount, but also on the model, the deductible, service and longer-term development. Capital returns are a possible buffer – not a second source of income for households.
The political trade-off remains
Behind the debate lies a legitimate conflict of objectives: on one side, the insured should benefit from good investment results. On the other, insurers must retain enough funds to remain stable even in bad years. The voluntary rule tries to combine both. Whether it actually eases premiums noticeably cannot be measured in a single year, only across the development of costs, capital markets and reserves.
The decision against an obligation does not remove the political pressure from the issue. It shifts it to transparency: insurers and the supervisory authority must make it comprehensible when capital returns are used, why they are retained and how this can be reconciled with sound financing.
