Officials in Zug have announced that they will be cutting the health insurance premiums of residents for two years. The Swiss canton said it was able to make the change because it had earned a surplus of money through taxation.

Canton Zug to cut health insurance premiums for residents

In a statement released on July 11, the government of Zug confirmed that all residents of the canton would see the cost of their basic health insurance fall in the coming years. It will do this by increasing state subsidies for treatments offered in hospitals.

Currently, Swiss cantons are required to cover at least 55 percent of the cost of hospital treatment, with the remainder charged to insurers and then policyholders through their insurance premiums. In 2026 and 2027, the government of Zug will cover 99 percent of the cost of care, relieving insurers of most of their financial burden.

Health insurance costs in Zug set to be lowest in Switzerland

As a result, experts predict that the cost of health insurance in Zug will decrease by an average of 18 percent, once the measures are taken into account when calculating new premiums for 2026 and 2027. In all, the average cost of basic health insurance in the canton will fall to just 58 francs a month or 700 francs a year - though this will depend on the insurance provider, the policyholder's age and the model of insurance.

While Zug already has some of the lowest healthcare and premium costs in the country, the measure will create the lowest premiums seen in Switzerland for decades. It will also be in stark contrast to the rest of the country, where premiums are forecast to rise in the coming years. 

Zug is able to afford the insurance subsidies, say officials

The canton estimates that the policy will cost 108 million francs in 2026 and 113 million francs in 2027. While the price tag may be high, officials explained that the cantonal government is very much in a position to foot the bill. “In recent years, Zug's public finances have developed very favourably,” they explained - in 2023, the canton ran a net surplus of 461,3 million francs. 

“A portion of the resulting surpluses will be returned directly to the population. In addition to tax measures, the government is relying on a temporary reduction in health insurance premiums,” the canton wrote. They argued that cutting the cost of health insurance was a quick, easy and streamlined way of passing on the canton’s good fortune to residents.

Will the lower premiums continue beyond 2027?

However, the measures themselves will only be in place until 2028, when the cantonal financing of hospital care will be made uniform across Switzerland, if approved by a referendum. The canton concluded that once the results of the vote were known, they would begin planning whether to continue the policy or not.

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