Private complementary coverage in
France
Role, regulation, market, and challenges
Valérie PARIS – December 7th, 2006
Joint OECD / Korea Centre of Health and Social Policy
Outline of the presentation
• Role of the private complementary
insurance in France
• Stakeholders on the market of
complementary insurance: status and
regulation
• Challenges for the French health system
The role of Voluntary Health Insurance
(VHI) in France (1)
• Mandatory basic coverage by social health
insurance
• Cost-sharing for most goods and services
• Scope for voluntary complementary
coverage
• VHI finances 13% of health expenditures
• Share of VHI in total expenditures varies
for different types of care
The role of Voluntary Health Insurance (VHI)
in France (2)
• Voluntary coverage provided by private institutions, which
actually provide two types of insurance:
– Complementary coverage for goods and services
incompletely covered by the statutory health insurance:
• Co-insurance rate
• Extra-billings (on average + 17% / official tariff for
specialists, 40% for surgeons, 30% for
ophthalmologists)
• Prices of medical goods exceeding reimbursement
prices
– Supplementary coverage for goods and services which are
not reimbursed at all by the statutory health insurance
• e.g. individual room in private hospitals, alternative
medicine non covered by statutory health insurance
VHI role in financing of health expenditures,
by type of care - 2005
Total
13%
Hospital care
4%
Public hosp
2%
Private hosp
9%
Ambulatory care
20%
Physicians
18%
Auxiliaries
11%
Dentists
35%
Laboratory
22%
Transport
3%
Medical goods
21%
Pharmaceuticals
18%
Other med. Goods
29%
0%
5%
10%
Source: National Health Accounts (DREES)
15%
20%
25%
30%
35%
40%
Expenditures of VHI, by type of care - 2005
Total VHI expenditure = € 19.3 billion (€ 308 /capita)
Other med.
Goods
13%
Hospital care
14%
Physicians'
services
18%
Pharmaceuticals
30%
Transport
0%
Laboratory
exams
4%
Source: National Health Accounts (DREES)
Dentists'
services
16%
Auxiliaries'
services
5%
The market of VHI: stakeholders
• Three types of institutions:
– Mutual funds
– Provident institutions
– Insurance companies
• With different characteristics and
regulation
The market of VHI: Mutual funds (1)
• Have been existing before 1945 Social Security Act
• Not-for-profit institutions, mainly financed through
•
•
members’ contributions, in order to provide
providence, solidarity and mutual aid to their
members and their families.
Governed by decisions of members’
representatives
Limited use of risk-rating or risk-selection
strategies
The market of VHI: Mutual funds (2)
• Several types:
•
•
– National funds for civil servants
– Company-based, professional, interprofessional
– General recruitment
Some of them provide goods and services
(hospitals, dental and optical care, pharmacies)
Some of them manage claims process on behalf
of basic health insurance
The market of VHI: Mutual funds (3)
• In 2001:
– 549 health funds (covering more than 3,500
members each)
– 29.9 million people covered
– For 20.5 million people contributing
– Health = 95% of outlays (health, providence,
social aid)
• Consolidation within the past 10 years, due
to European legislation
Source: Roussel, 2003
The market of VHI: provident institutions
• Private, not-for-profit
• Initiated by employers and employees, and
•
•
administered by boards with equal
representation
Mainly oriented towards collective coverage and
social protection
In 2001
– 78 PI provide health coverage, for 5 million people
(through mandatory membership for 80% of them)
The market of VHI: Insurance companies
• Two types, both private
– Insurances: for-profit insurance companies
– Mutual insurances: insured members grouped
on socio-professional basis and proprietors of
the society – not-for-profit
• About 118 companies operate on the
French market for health insurance
• Health represents 5% of their revenue
VHI market (% of VHI expenditures, 2005)
Private
Insurance
23,9%
Provident
institutions
19,2%
Source: National Health Accounts (DREES)
Mutual funds
56,9%
VHI market: types of contracts
• Individual (40%)
• Collective contracts (56%)
– Generally co-sponsored by employers
– Mandatory in 50% of cases
• Inequities in coverage and quality of
coverage, according to activity, sector of
activity, professional status, age
Type of affiliation and type of VHI (2004)
Employersponsored
% of population covered
Individual
56,4
40,1
Mutual fund
56,6
62,7
Provident institution
19,2
6,4
Insurance company
19,9
28,2
4,3
2,6
By type of VHI
n.a.
Note: 3.5% of people do not know
Source: French Health, Health Care and Insurance Survey (ESPS), IRDES
Regulation: regulatory bodies and legislation
Regulatory body and legislation
Mutual funds /
Provident
Institutions
Ministry of social security
Insurance
companies
Ministry of Eco and Finance
Code de la Mutualité / Code de la
protection sociale
Code des assurances
• The Commission for the control of mutual funds,
insurance companies and provident institutions
is responsible for consumer protection
Regulation (1)
• Exclusion of medical condition
– Not allowed for collective contracts
– Allowed in individual contracts, with two conditions
• Consumer must be informed of medical conditions excluded
prior to enrolment
• In case of litigation, the insurer has to prove that the
condition existed before enrolment
– After two-years, the insurer can not unilaterally
terminate the contract
• Continuity of protection
– Collective contracts obtained through employment:
the insurer is required to offer a contract at
retirement, with a premium capped at 150% of the
previous premium
Regulation (2)
• Specialisation
– Institutions providing insurance coverage can
not provide other commercial services
– Issue for mutual funds formerly providing
medical services
• Solvency requirements
Regulation (3)
• Premiums requirements
– Solidarity principle: premiums can be adjusted
to take into account: income, enrolment
duration, mutual fund, geographic location,
number of beneficiaries, age.
Typically mutual funds, PI
– If not, no requirement
Insurance companies often use health
questionnaires to adjust premiums
Regulation (4)
• Tax incentive
– 7% of tax reduction on complementary health
coverage for contracts compliant with the
solidarity principle (i.e. not requesting health
information before enrolment and not linking
premiums to health status)
– Since 2004, contracts must also be
“responsible” to benefit from tax reduction
Regulation: benefits requirements
• Creation of responsible contracts by the Health insurance
reform, August 13, 2004, with specific requirements
– No coverage of the deductible of €1 per physician visit
– No coverage of penalties (increased cost-sharing and
possible extra-billing) for non-coordinated care
– Coverage of cost-sharing for physician visits up to 100%
– Coverage of cost-sharing for prescribed (important)
pharmaceuticals and laboratory exams up to 95%
– Coverage up to 100% of at least 2 procedures in a list of
preventive procedures established by the Ministry of
Health
Regulation: specific rules for complementary
health universal coverage (CMU-C)
• Inequities in complementary coverage and access to
•
care
Creation of CMU-C in 2000
– Means-tested access to free complementary health insurance
(CMU-C) for the poorest part of the population.
– CMU-C provided by VHI institutions OR by sickness funds, in
exchange for a flat premium paid by a specific national fund
– Benefit basket defined by the State
– Providers not allowed to charge extra-billing
– Direct payment by third-party payers
– In 2005, 4.7 million beneficiaries (7.5% of the population)
Regulation: specific rules for complementary
health universal coverage (CMU-C)
• Remaining issues:
– Non take-up of CMU-C by eligible people
– Refusal of care by health professionals
– Lack of complementary insurance for people with
income above the threshold for CMU-C eligibility
• Completed by vouchers for the purchase of
complementary insurance for people with revenues
exceeding CMU-C income threshold by less than 15%
– Non take-up by eligible people
A new role for VHI institutions?
• Until now, VHI institutions have been passive
•
payers of co-payments
In 2004, creation of the Board of VHI institutions
– Gives advices to the Board of basic health insurance
about inclusion of procedures in the benefit basket
– Participates in the committee which negotiates drug
prices with the pharmaceutical industry
• Some VHI announced that they will not cover
drugs whose reimbursement rate has been
lowered to 15%
A new role for VHI institutions?
• Recent (and rare) new forms of contracts:
– Bonus contracts: reduced premium associated
with a deposit, which can be partly (totally)
refunded to the insured if the level of benefits
received is lower than the deposit (or null)
– Contracts with incitation to “preventive” care
(expenditures for supposed “healthy food”
partially reimbursed to the insured)
Impact of VHI on French health system
• Suspected of thwarting cost-containment plans based on
•
•
•
•
increases in cost-sharing
Has become indispensable for access to care because of
increases in cost-sharing on necessary care
Creation of CMU-C for poor people not covered by
complementary protection and of vouchers for the
purchase of complementary insurance
In terms of equity, VHI is regressive while basic coverage
is slightly progressive
Expansion of VHI coverage allows cost-shifting and
therefore prevents from more rationale definition of
benefit basket insured by basic health insurance
Useful references
Private insurance in France,
T.C. Buchmueller & A.
Couffinhal,
OECD Health working paper
No. 12
Thank you for your attention