“The MHI [Mandatory Health Insurance] system as outlined by KVG/LAMal is – at least to a certain extent – based on the concept of regulated competition (Enthoven, 1988). MHI companies compete in a highly regulated market by offering different MHI policies for a standard benefits package (section 3.3.1), which all residents have to purchase. MHI companies are not allowed to turn down applications from persons who want to purchase insurance and they may not make profits (nor losses) from providing MHI. Excess earnings have to be reinvested in the company and must benefit the insured.

“Resources are raised not only through MHI premiums but also through federal and cantonal taxes (see section 3.3.2). The Confederation plays a strong regulatory role (see section 2.8.1) in monitoring MHI activities and premium levels, in setting the framework for cantonal premium subsidies to low-income households (see section 3.3.3), and in determining the risk-adjustment mechanism (see section 3.3.3). Interactions between purchasers and providers (see section 3.3.4) are shaped by the corporatist tradition of collective contracts, and all providers that have been authorized by cantons (see section 2.8.2) are allowed to provide services reimbursable by MHI.”

Source: De Pietro C, Camenzind P, Sturny I, Crivelli L, Edwards-Garavoglia S, Spranger A, Wittenbecher F, Quentin W. Switzerland: Health system review. Health Systems in Transition, 2015; 17(4):1–288. http://www.euro.who.int/en/about-us/partners/observatory/publications/health-system-reviews-hits/full-list-of-country-hits/switzerland-hit-2015