Every autumn before the November 30 insurance deadline, expats and residents in Switzerland face the same question: Which franchise (deductible) should I choose? In Switzerland, adults have 6 statutory franchise options under the KVG/LAMal: CHF 300, 500, 1000, 1500, 2000, and 2500 . However, under Swiss federal law ( Art. 91b KVV ), the mathematics of premium discounts make all intermediate franchises (500 to 2000) strictly suboptimal. Here is the mathematical breakdown of the “Dead Zone” and how to find your personal break-even point. => The Statutory Rules (The Formula) Your total annual healthcare cost consists of three components: Annual Premium: Monthly Premium × 12 Franchise (Deductible): You pay 100% of medical bills up to your chosen franchise amount ($F$). Co-payment ( Selbstbehalt ): After passing the franchise, you pay 10% of further medical costs, strictly capped at CHF 700 / year ( Art. 64 Abs. 2 KVG ). => The Universal Golden Rule: Only Two Franchises Make Sense Mathematically, you should almost never choose CHF 500, 1000, 1500, or 2000 . You should only pick either CHF 300 or CHF 2,500 : Choose CHF 2,500 if: You are generally healthy and expect your annual medical bills to be below ~CHF 1,900 – 2,000 . Choose CHF 300 if: You have chronic conditions, take regular prescription medications, expect a planned procedure/maternity, or anticipate medical bills exceeding ~CHF 2,000 . => Why the 500–2000 Franchises are a “Dead Zone” Under Swiss Federal Ordinance ( Art. 91b KVV ), insurers are legally restricted to offering a maximum premium discount of 70% of the additional risk you take on. Because the discount scale is capped, the premium savings you receive for moving from CHF 300 to CHF 500, 1000, 1500, or 2000 are disproportionately small compared to the extra risk: Scenario A (You stay healthy, CHF 0 bills): CHF 2,500 saves you the maximum annual premium (~CHF 1,540/year). Picking CHF 1,500 leaves CHF 700+ of guaranteed premium savings on the table. Scenario B (You have a major hospital stay, CHF 10,000+ bills): CHF 300 caps your out-of-pocket franchise payment at just CHF 300. Picking CHF 1,500 forces you to pay an extra CHF 1,200 out of pocket, while your annual premium discount was only ~CHF 800. In every single expenditure scenario (from CHF 0 to CHF 100,000+), an intermediate franchise results in higher total out-of-pocket costs compared to either the optimal low-risk (300) or optimal high-deductible (2500) choice. => The Mathematical Break-Even Point ($M^$) The exact point where CHF 300 and CHF 2,500 cost the exact same total amount is:$$\text{Break-Even Medical Expenses } (M^) = \frac{\text{Annual Premium Savings} + \text{CHF } 270}{0.90}$$ Across most Swiss cantons and models (Telmed, HMO, Standard), the annual premium difference between a 300 and 2500 franchise is roughly CHF 1,500 to CHF 1,580 / year . Plugged into the formula, the exact break-even threshold lands at ~CHF 1,967 / year (roughly CHF 164/month in doctor visits or medications). => What is the “Worst-Case Risk” of Choosing CHF 2,500? Many people fear picking CHF 2,500 because of the higher deductible in case of an unexpected accident or illness. However, because you save ~CHF 1,540 in guaranteed annual premiums upfront: Extra deductible paid at CHF 2,500: CHF 2,500 - CHF 300 = CHF 2,200 Subtract guaranteed premium savings: CHF 2,200 - CHF 1,540 = CHF 660 Your maximum real financial risk for the entire year is strictly bounded at around ~CHF 650 – CHF 750. If you have that buffer in your emergency savings, CHF 2,500 is mathematically the winning bet for healthy adults. Hope this breakdown helps anyone reviewing their insurance models or planning their healthcare budget in Switzerland! submitted by /u/Bhautik_LivingSwiss
Originally posted by u/Bhautik_LivingSwiss on r/Switzerland