New sickness insurance legislation adopted

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A new law overhauling France's jointly-managed sickness insurance system was adopted in August 2004, though many details of its implementation remain to be clarified. How effective the legislation will be is still a subject of much debate. The 2005 budget estimates published in September indicate that, despite the reform, the financial difficulties facing the sickness insurance system remain. Trade unions are critical of the new measures.

The government put a sickness insurance bill to parliament in July 2004, following a period of consultation during which the social partners criticised various aspects of its reform package (FR0406105F and FR0405104F). The bill was passed by parliament on 30 July. The Constitutional Council (Conseil constitutionnel), to which members of the parliamentary opposition referred the proposed legislation, endorsed all its various provisions on 12 August.

Key reforms

The main changes brought about by the new sickness insurance legislation are set out below.

Responsibilities

The law places more responsibility on patients and professionals and introduces money-saving measures to tackle abuse, as follows:

• starting in 2005, taxpayers will be required to pay a fixed sum of EUR 1 per consultation or medical treatment. Hospitalised patients, minors under 16, those covered by the 'universal complementary sickness insurance' (couverture maladie universelle complémentaire) - ie free means-tested state-financed top-up health insurance - and women covered by maternity insurance will be exempt;

• by 2007, all sickness insurance beneficiaries will have personal medical files recording care and treatment received;

• doctors will have access to information contained on electronic health insurance cards. In the future, these cards may carry photos of the insured party;

• beneficiaries suffering from medical conditions that require them to use the system for long periods of time will only be exempt from paying all or a proportion of user fees if they are able to provide the doctors they consult with a 'protocol of care' endorsed by a social security fund doctor;

• all sickness insurance beneficiaries will be eligible for standard user fees only if they have a regular general practitioner (GP). If they do not, higher user fees may be applied and those specialists who see patients directly without an official referral from a regular GP may charge more than the standard rate;

• there will be stiffer financial penalties for fraud and abuse;

• insured parties on sick leave will be more strictly monitored. Daily benefits will be suspended where insured parties fail to submit to the monitoring process; and

• checks on undeclared work by people off sick will be reinforced.

The minister responsible has let it be known that he intends to increase the daily 'hotel charge' hospital fee from EUR 13 to EUR 14 by 2005.

New income

Starting in 2005, taxpayers will have to pay the 'universal social contribution' (Contribution sociale généralisée, CSG) (FR9710170F) at a rate of 7.5% on pay and of 6.2% on unemployment and sick leave benefits, as well as the 'social debt reimbursement contribution' (Contribution pour le Remboursement de la Dette Sociale) (FR9712184F) at a rate of 0.5% on all types of income, on 97% of their tax bases instead of the current rate of 95%. The CSG levy will also be increased on old-age pensions, disability pensions, investment income and gambling winnings.

Starting in 2005, the current 'social solidarity contribution' (contribution sociale de solidarité) levied on company profits at a rate of 0.13% will increase to 0.16% for those businesses with a turnover above a certain level. The contribution levied on the turnover of pharmaceutical laboratories will also be raised.

Governance

The reform introduces a new type of governance in order to improve financial discipline in sickness insurance. A High-level Health Authority (Haute Autorité de Santé) has been created as an independent, scientific authority responsible for assessing medical services provided to the public. The organisation of sickness insurance has also been overhauled, as follows:

• the powers of the National Sickness Insurance Fund (Caisse Nationale d'Assurance Maladie, CNAM), which administers the system, have been widened; and

• three new national representative bodies have been set up. The National Union of Sickness Insurance Funds (Union nationale des caisses d’assurance maladie, UNCAM) is to have authority in negotiating 'consultation and treatment refund rate' agreements with health professionals. The National Union of Supplementary Sickness Insurance Bodies (Union nationale des organismes d’assurance maladie complémentaires) acts as an umbrella group for mutual insurance entities, provident institutions and private insurers, and will provide opinions on decisions made by UNCAM. The National Association of Healthcare Professionals (Union nationale des professionels de santé) will make recommendations on decisions proposed by UNCAM.

National sickness insurance funds will be required to submit an 'estimated budget proposal' in the first half of every year. A Sickness Insurance Spending Increase Watchdog (Comité d’alerte sur l’évolution des dépenses d’assurance maladie) will be responsible for developing remedial measures when spending overruns estimates by 1% or more.

Tax credit

Starting in 2005, those subscribing to individual supplementary sickness insurance contracts will be eligible for a tax credit. This scheme targets people whose incomes, while sufficiently high to disqualify them from universal complementary sickness insurance, are no more than 15% above this ceiling.

Concern remains

The full details of the reform will only be known when nearly 70 implementing regulations are published.

A report published by the Court of Auditors (Cour des comptes) in mid-September 2004 highlights the limited capacity of the government's reform to curb spending. The report advocates stronger checks on long-term healthcare users, ie those with serious medical conditions, who, as a result, are exempt from paying user fees. It also calls for closer scrutiny of those budget items that have recorded significant increases, such as transportation costs and daily sickness benefits, particularly those linked to long-term sick leave.

When making public the content of the upcoming social security funding bill for 2005, in particular the national sickness insurance spending target, the minister responsible estimated that his reform package will bring the rate of increase in spending down from 5.5% in 2004 to 3.2% in 2005.

The Social Security Audit Committee (Commission des comptes de la sécurité sociale), tabled a report on 21 September 2004, in which it forecast a historic deficit of EUR 14 billion for the general social security fund in 2004. It predicted that this would fall slightly to EUR 10.1 billion in 2005. Four-fifths of this new deficit would be due to the sickness insurance branch, whose total deficit is forecast to fall to EUR 7.9 billion in 2005 from EUR 13.2 billion in 2004. This predicted reduction in the sickness insurance deficit would come mainly from the EUR 5 billion of new income generated by the new law, which was adopted on 13 August 2004.

Reactions

The trade unions stand by their initial criticisms of the sickness insurance reform (FR0406105F). The General Confederation of Labour (Confédération générale du travail, CGT) has reiterated its disagreement with a reform that, in its view, penalises the insured. It has expressed concern that compulsory sickness insurance is being weakened in favour of supplementary insurance. The French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) does not agree with specific reform measures such as the non-refundable fee for each consultation or treatment. It fears that allowing specialists to exceed standard fees for patients not referred by their regular GP will lead to 'two-tier medicine'. In the view of CFDT, the effectiveness of the new measures will be excessively dependent on the attitude adopted by healthcare professionals. However, CFDT is pleased that a planned experiment involving competition between the social security health insurance system and private insurance in specific regions has been scrapped.

The General Confederation of Labour-Force Ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) fears that the introduction of new accounting mechanisms will lead to expanded use of supplementary insurance. CGT-FO, for whom the main issues have yet to be answered, has also expressed its concerns over the upcoming social security funding bill due to be tabled in parliament in autumn 2005. (FR0306106F). The remaining unions are also not satisfied with the reform

Commentary

The exact shape and form of the reform package will not become fully clear until the implementation texts are published. A lot of uncertainty remains. It has already become apparent that the overhaul will not be enough to carry the system out of the red. This will only be possible when the government really gets to grips with the central issue of pay for healthcare professionals, especially consultation and treatment-based doctors' fees, which it has so far been careful to avoid. (Antoine Math, IRES)