To help residents with the rising cost of Swiss health insurance, the government has agreed to raise the limits for deducting insurance premiums from income on tax returns. The move follows weeks of debate on how to stop the imminent rise in the cost of supplemental and basic health insurance in Switzerland.

Health insurance costs to be offset through taxes

The Federal Council has decided to increase the amount residents are able to deduct from their taxes from health insurance premiums. This is where a portion of the cost of someone's health insurance is subtracted from the amount used to calculate federal income taxes, making the tax bill cheaper.

Couples who are married will be able to deduct up to 6.000 Swiss francs of health insurance contributions from their joint income when filing federal taxes, instead of 3.500. For individuals, this amount will go from 1.700 to up to 3.000 francs for each adult and from 700 to up to 1.200 francs for every child. For individuals with a salary of 60.600 francs a year and a supplemental insurance package of 300 francs a month, the policy would reduce federal taxes by around 15 percent.

While the new plan will not prevent premiums from rising, as they are expected to this year, the move will allow people to offset parts of the rise through tax savings. The National Council expects the policy to cost around 400 million francs a year to implement.

Insurance plan both welcomed and condemned in Swiss parliament

The move has been welcomed by the Swiss People’s Party, which said in a statement that the law brought relief to struggling households. "Inflation is melting the purchasing power of the Swiss population like butter in the sun," they noted, asserting that reducing the tax burden would help support those in need.

However, the idea was met with anger in some quarters, with Social Democratic Party President Samuel Bendahan calling the idea “absurd.” “Approximately half of the population do not pay direct federal tax. Increasing the deductions would therefore only benefit the wealthiest people, in addition to depriving the state coffers of 400 million francs per year,” he argued.