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Situated in central europe, switzerland is a federal republic with the tradition of economic liberalism. On the financing of the health care system, there is also a long involvement of private health insurance market. It dated back to 1911 when the first health insurance act was passed.facing a rapid growth in the health care expenditure and supply-demand imbalance in the market, after repeated debates, the swiss adopted a new health insurance act in the mid-90's. The act requires all residents and those who live in switzerland for more than 3 months to have compulsory health insurance which covers all basic health care services.with the new act, switzerland maintains a close relationship between the health care system and the private insurance market. The federal government only plays roles in legislation, monitoring and essential support, whereas the cantonal governments are responsible for the provision and the actual operation of public health care services. However, the degree of government involvement and intervention has been controversial. Private insurance companies are prohibited to decline any individual to be insured, even if one is an elderly or is ill. Moreover, premium of the same insurance company must be flat-rated and non-profit making in nature. The swiss government regards this as a reflection of the society's solidarity with which switzerland exists. However, there are diverse views that such a practice only leads to unfairness, as regardless of the frequency of using health care services, all have to pay similar amount of premiums.the coverage of the basic compulsory health insurance is another controversial issue. In principle, those health services, which are medically effective and necessary for the health and prevention of disease of the population, should be covered. However, some swiss consider the coverage is too broad and thus increases the premiums, so they cannot agree with it.to enhance the efficiency and to prevent the abuse of health care services, policies such as the deductible are adopted in switzerland. The swiss are required to pay an annual deductible and part of the remaining health care fees, approximately 10%, when receiving health care services. Insurance companies only pay the rest.even though there are measures for preventing the abuse of services and thus reducing the costs, the swiss still face pricey health care expenditure. To relieve the burden of the lower class, the government provides a safety net measure. The upper limit of the population's payment on premium is about 8% of their income, over which there will be subsidies from the government. Compared with other countries, the efficient swiss health care system indeed blends the concepts of market competition together with government regulation.
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