Rain of money in the canton of Zug Government distributes generous relief

The wealthy canton of Zug wants its residents to share in its financial surplus. In addition to a significant reduction in health insurance premiums, further measures are planned to ease the financial burden on citizens.

This is the kind of problem every finance director would like to have: the canton of Zug has so much money that it doesn't know what to do with it. In recent years, the canton has made profits of several hundred million francs.

Now a solution has been found. While residents of other cantons are suffering from rising health insurance premiums, the Zug government is proposing to cover almost the entire cost of inpatient hospital treatment for Zug residents in 2026 and 2027.

The government intends to submit the proposal directly to the Cantonal Council. A referendum-capable resolution is expected to be passed at the end of January 2025.

Premium savings of 700 francs

For the approximately 130,000 inhabitants, this means an average premium saving of 18% or around CHF 700 per year - although differences are possible depending on the model. Health Director Martin Pfister explained to Blick that the idea of covering hospital costs was developed by the cantonal government in order to return some of the high income to the population.

Although there are no exceptions for newcomers, Pfister does not believe that the canton will now be overrun by newcomers, as there are only a few free apartments. Pfister also believes it is unlikely that patients will postpone their operations until 2026 in order to save on their deductible. Operations would be carried out for medical reasons and with limited capacity.

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These measures apply for two years. However, there is a possibility that premiums will rise again after that. "The cantonal parliament will then have to decide how to proceed," says Pfister. In November, Switzerland will also decide on uniform hospital financing, which could also be taken into account.

This action will cost the canton of Zug around CHF 220 million. The government is now swiftly referring the proposal to the cantonal council. Theoretically, a referendum could be initiated. Will anyone oppose such a premium gift?

No tax on AHV?

Thanks to its low taxes, Zug is an attractive location for large companies. The canton benefits from many international companies and the super-rich. The commodities trader Glencore alone paid CHF 250 million to the Swiss tax authorities last year, as reported by the Handelszeitung newspaper.

And the forecasts remain positive: with the OECD minimum tax, further millions could flow in. The health insurance boon is just the beginning. The Zug government has decided on further measures to provide financial relief for the elderly in particular, according to Finance Director Tännler.

These measures are to be announced next week. Tännler had already announced to the NZZ in April that he was considering exempting poor pensioners from paying AHV taxes. He is also considering lowering the fees for services that are needed by the majority of the population. It is quite possible that Tännler will get serious on Monday.

More money for premium reductions

Zug remains an exception. Most cantons only pay the minimum contribution of 55% of inpatient hospital costs, as a list from the Cantonal Conference of Health Directors shows. Only the canton of Basel-Stadt pays 56%.

"The canton of Zug is a special case due to its financial resources," explains spokesperson Tobias Bär. "With the counter-proposal to the premium reduction initiative, most cantons now have to spend more money on premium reductions, which also benefits the population."