That is their Hospita General policy, which covers hospital stays outside of your home canton in general ward. It's a supplementary policy, so yes, I think you had to cancel it three months in advance.
However, I heard (in another thread on here) there was some changes to basic insurance that would cover hospital stays outside your home canton, which would mean it would cover some of that SWICA supplementary policy.
Changes to Basic Cover in 2012 Probably best to ask SWICA what the Hospita General coverage will include that the basic will not for 2012.