Assessment of health insurance system post-reform

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In late November 2005, the French Parliament passed the 2006 Social Security Finance Act (Loi de financement de la Sécurité), which is a component of the August 2004 Health Insurance Reform Act. The legislation is designed to end the deficit in the social security system by 2008.

The 2004 legislation set out three targets (FR0406105F):

• to balance the health insurance system finances by 2007;
• the development of a 'medical care roadmap', requiring patients to choose a permanent general practitioner. In the long term, a Personal Medical File (dossier médical personnalisé, DMP), will be created.
• the re-organisation of health insurance, with particular emphasis on the development of a single top-up insurers’ body to be known as the National Association of Top-up Insurers (Union nationale des organismes complémentaires, UNOC).

Health insurance system costs

For 2006, the Social Security Finance Act is to achieve this balance through:

• increased revenue:
  • the levy on the pharmaceutical industry is to be increased from 1.6% to 1.76%;
  • the existing partial or total tax exemption for certain types of income will be scrapped. This will affect part-time work, redundancy compensation, and interest on housing-related savings.

The government has opted not to tax the non-mandatory, profit-sharing schemes operated in some companies.

• lower coverage levels:
  • the EUR 1 increase in the daily fee charged for hospital care, set out in the August 2004 legislation, was brought into force;
  • several hundred so-called 'low-performance drugs' will now either have only a small part of their cost covered or be dropped from coverage altogether;
  • in November 2005, the government announced that an EUR 18 lump sum would henceforth no longer be covered for all hospital bills over EUR 91. Patients such as pregnant women, industrial accident victims and Universal Health Coverage recipients will be exempt. The decision, which was only disclosed at the very last minute, met with across-the-board criticism.

The Minister did, however, say that he expected this cost to be picked up by private top-up health insurance companies or mutual insurers. This generated criticism of the decision as a whole from top-up insurers, who had not been consulted.

In 2005, the government anticipated EUR 1 billion savings, to be generated in the following ways:

• for half of the amount, a stricter definition of the types of care for people with long-term medical conditions that are totally covered by the social security system;
• a reduction in the frequency of sick leave in the workplace;
• a reduction in coverage for specific drugs.

In actual fact, savings generated as of the end of October 2005 stood at nearly EUR 600 million. However, the drop in time lost through sick leave has resulted in the main savings of EUR 400 million, whereas the government had only forecast EUR 150 million in savings.

The financial results pertaining to the other measures are much more disappointing. In August 2004, the government announced that it was aiming to balance the books by 2007. However, the 2006 Social Security Finance Act pushed this target date back further to 2008.

Parliament approved a targeted 2.5% increase in spending for 2006. Many experts view this as optimistic. Current available statistics for 2005 indicate a growth rate of over 4%.

Personal medical file scheme

The government has been satisfied with the growing number of patients who have already selected their 'attending' doctor. Surveys show that fewer than 10% of social insurance contributors remain hostile to the idea.

In mid-November 2005, the National Health Insurance Fund (Caisse nationale d’assurance maladie, CNAM), introduced a 10% cut in coverage for patients failing to comply with the 'medical care roadmap'. Many questions pertaining to this issue remain unanswered.

In theory, patients signing on to the road map must have access to care at health insurance fund rates. In an attempt to ensure that patients consulting physicians not bound by health insurance fund rates, i.e. so-called category II physicians, have such access, the 2004 legislation contained a provision for a coordination scheme. The increasing number of professionals charging more than the standard fees is jeopardising the medical care roadmap.

The competitive bidding process for the selection of contractors to set up the personal medical file management system is already underway. However, a Senate report by Jean-Jacques Jegous on computerisation in the healthcare sector casts doubt over the time and estimated funds required to fully implement the personal medical file scheme.

The role of top-up insurers

The August 2004 legislation created the National Association of Top-up Insurers (Union Nationale des Organismes Complémentaires, UNOC), as an umbrella body covering all top-up health insurance providers. It was planned that this new entity would become one of the stakeholders in health insurance policy.

The National Association of Top-up Insurers only really came into being late in the first quarter of 2005. However, the various constituent parts of the new entity have already complained that the government is taking decisions without consulting them. This was certainly the case in relation to the withdrawal of coverage for low-performance medication and the EUR 18 reduction in general fund coverage for hospital care bills of over EUR 91.

Reaction

The current debate has been focusing on the size of the increase in top-up insurance premiums as a result of the cuts in core health insurance scheme coverage. The government has asserted that the shift in the cost burden resulting from the changes will be offset by reduced spending on medication. In the 2006 Social Security Finance Act, the government opted to significantly increase top-up insurance purchase assistance. This initiative was set in place by the August 2004 legislation, to enable those with incomes slightly above the Universal Health Coverage (couverture maladie universelle, CMU) ceiling to purchase top-up insurance.

Trade unions have claimed that the new levy on non-elective hospital care is tantamount to amending the Solidarity Pact (pacte solidaire), on which the health insurance system is based (FR0504105F).

Commentary

The August 2004 reform initiative aimed at controlling health insurance spending rather than health spending as a whole.

The reform initiative allowed for the possibility of off-loading some costs onto individuals and top-up insurers. This was offset by the government’s pledge to give top-up health insurers a greater say in risk management. The government was banking on their greater bargaining power with professionals to influence costs and prices.

While costs have undoubtedly been shifted onto patients, especially by the very harmful increase in the disparity between health insurance coverage rates and the fees actually charged by professionals, it remains to be seen whether the new association of top-up insurers will really prove to be a strong player. (Pierre Volovitch, IRES)