EDIT: added github link
I’ve always been curious about the variety of premiums/deductible plans for any Swiss health insurance. I wanted to check what is the cheapest depending on how much you spend in health, so I created a python script #NerdAlert
I expected that each premium would have a window of expense in which it is more favorable to select it. That is: for no health cost in a year: the highest deductible is cheaper, and for a lot of expenses: the lowest deductible is cheaper overall. And same for intermediate plans.
However, it turns out that it is mathematically impossible to have more than 3 regions with a different optimal plan. In practice I’ve not found a health insurance where there is more than 2 best regions. This means that all intermediate plans are useless and never cheaper in any case
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Am I correct? (I can provide the python script to plot this) Are people aware of this? The government kinda fixes these prices, so I’m surprised they don’t take us seriously with this scam…
TLDR: Intermediate deductibles for Swiss health insurances are useless and a pure loss of money for us.
actually for my own health insurance the cheapest plan above 1.1k CHF is not the lowest deductible 300 but the 500 one: in this case the 300 plan is a scam.
Not all health insurance premiums are equals
byu/Sea-Zucchiny inSwitzerland
Posted by Sea-Zucchiny
14 Comments
yeah this is well known
Thought this was common knowledge. But I’ve never seen it plotted through like this.
I want to understand further, can you explain the graph and why your 300chf plan is a scam for you?
Care to do the labels in German to spread the word?
I’ll add one more thing that is a small correction in favor of the larger deductible:
– you can detract (in most cantons) from taxes the health insurance only up to a fixed amount
– you can detract (in most cantons) actual health costs only after a minimum amount.
Most Swiss dont compare health insurance anyways and stay with their long time company. Same as mobile phone plans.
That‘s pretty well known, it‘s a choice between 300 (if you‘re chronically ill) or 2500 (if you‘re healthy) Franchise. The breakeven point though varies by insurance company. For me it‘s 1600.
Another scam is that you have to know in advance, how much your healthcare expenses in the next year will be
That’s what my insurance advisors all said.
Yup, well known, always go with the lowest or highest franchise. You’re not the first one to do the maths and report the results on this sub either.
Funny enough I plotted this to recently. My break even point was around 1700.-
Guys do not ever get another premium besides 300.- or 2500.-
Its always a scam
Edit: I meant deductible
It is true. Everybody knows that. Unless you know exactly, what cost you have, you should always pick the lowest deductible if you are a sick person or the highest, when you are healthy.
Nice plotting, thank you for the analysis.
The different franchises are there mostly to give clients an illusion of diverse choices when in reality for the vast majority the actual choice is between extreme options with an escape from the middle ground for indecisive clients. The number of people who have enough capacity to pick something in the middle and then have enough discipline to ask about prices for their healthcare and get to the target number at the end of the year that will justify their initial choice against other options is negligible.
I wouldn’t be a financial nerd if I avoided noticing, that we have a very different definition of “scam”.
>in this case the 300 plan is a scam
That is only a scam if the insurance agent had precise knowledge about your future or a reliable enough statistical model and data about the expected value of your health costs but deceived you about your best choice and persuaded you to buy an unnecessarily expensive product.
Since you didn’t tell that part in your text, we have no such inputs and consider the default situation (parties have non-conclusive data about the client’s future health expenses, and the decision is made mostly based on the client’s risk aversion profile and previous experience). Then it is not a scam but rather a sub-optimal choice. That would be a great stretch to call an act of offering basic insurance with minimum franchise without knowing upfront about your moderate health expenses a fraud. It doesn’t feel fraudulent or deceptive.
Thanks for plotting this. I agree that the intermediate plans appear to be useless if you know your x-axis value in advance. Their value comes from uncertainty. We can imagine customers who expect to have extremely low health costs but want to hedge their bets against tragedy. In that case, the “Deductible 1000” could be a good product.