Health Insurance Vouchers Plan

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Featured in half-yearly report: Health Policy Developments Issue 4

Abstract

The health insurance vouchers plan aims to extend the population who may benefit from a supplementary health insurance, and then: - offset the negative impacts of the threshold effect that occurs following the implementation of the universal complete health insurance coverage dedicated to the poorest; - Beginning to regulate the voluntary health insurance market. The voucher is a grant aiming at lowering the supplementary insurance contract cost.

Purpose of health policy or idea

The main objective of the health insurance vouchers plan (called tax credit plan) is to favour the access to health insurance to a targeted part of the population that is still, for a large proportion without a supplementary insurance (around 3 millions). As a matter of fact, the measure has to offset the negative impacts of the threshold effect that occurs following the implementation of the universal complete health insurance coverage dedicated to the Poorest (a means-tested free supplementary health insurance called Couverture Maladie Universelle Complémentaire, CMUC) since 2000. This should increase the redistributive impact of the public health insurance system. The CMUC is granted under revenue conditions, thus it excludes from the free supplementary insurance a part of the population that has no supplementary insurance contract whatever the insurer (for profit or not for profit). The expected outcomes are twofold:

• By extending the population who may benefit from a supplementary health insurance, the health insurance vouchers plan could increase the access to health care and thus the redistributive impact of health insurance (in terms of social health inequalities).
• Moreover, the contracts that can fall within the health insurance vouchers plan have to verify some specifications enforcing a minimal level of quality for the eligible contracts. It may thus be viewed as the beginning of a regulation of the voluntary health insurance market

The incentives are only financial incentives. The health insurance vouchers plan entitles to a deduction of the supplementary insurance contract cost based on both the number of individuals within the household and on the age of each, then the amount of the voucher is:

• 150 € for the first individual 150 €
• 134,5 € for the second individual upper or equal to 18 years old
• 75 € for the second individual under 18 years old
• and 75€ for any supplementary individual

For an individual over 60 years old, the voucher is rated up: 250 €

The voucher is granted for one year, but is renewable as long as the household income is lower than 15% over the limit on CMUC system (that also depends on the number of individuals in the household) or 10,8% over the limit on the CMU system.

To benefit from the voucher, the individual has to apply for the CMUC to the local public health insurance fund. If the individual is not eligible for the CMUC, he may however be eligible for the health insurance vouchers plan. In this case, the individual has to choose a supplementary contract and using a certificate of eligibility from the public local health insurance fund (noting the level of the subsidy), he only pays the residual cost to the supplementary health insurer.

Any supplementary insurer is allowed to offer eligible contracts for the tax credit but the contract has to verify a certain number of characteristics (no age limit, no medical questionnaire or examination and no probationary period). However, the health providers do not bear the same restrictions as in the case of beneficiaries of the CMU basis system, they are not bound to charge the patients according the conventional price without extra-billing.

Main points

Main objectives

Extend the population who may benefit from a supplementary health insurance and then offset the negative impacts of the threshold effect that occurs following the implementation of the universal complete health insurance coverage dedicated to the Poorest.

First steps towards regulating the voluntary health insurance market.

Type of incentives

Financial incentives by means of a deduction of supplementary insurance contract cost.

Groups affected

Patients, consumers, Supplementary insurance company, mainly not for profit insurer, Government

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

Political and economic background

A similar system of vouchers was already in place before the reform. Indeed, the health insurance vouchers plan exists since August 2002 and allowed the individuals who cannot benefit from the generous and free system of the CMUC because of their incomes. The targeted individuals were determined by their income that had to be lower than 12,7% over the limit on the CMUC. The system was implemented to complete the overall CMU system. The eligible individuals were in 2002 around 3 millions, but at the end of 2003, only 7 431 individuals actually benefit from the system. The health insurance vouchers plan had already the main characteristics than the one implemented today with three differences:

• A law now organizes the health insurance vouchers plan. The previous "version" resulted from a memorandum service instruction (CNAMTS August 2002). This could change the impact of the policy. Indeed, only a bit more than half of public local health insurance funds offered actually the vouchers since the law. Now, they don't have the choice anymore and according to the law they have to broadcast the information to the eligible insured and to implement the voucher system.

• The reform law (article 56) mentioned the term tax credit even if the eligible individuals don't actually pay the income tax and even if the financial subsidy system is still the one of the voucher.
• All financial subsidies have been increased.

Public authorities emphasizes the health insurance vouchers plan mainly because of the other measures of the reform of the health insurance system. Indeed, this reform foresees to implement at the beginning of 2005 an uninsurable co-payment for almost all encounters to health system (except hospitalisations).

The reform reorganizes the access to ambulatory health providers and will reduce public coverage for those who still go to a specialist without a referral from their usual physician. All these measures tend mainly to increase the financial risk for patients. To prevent too large a social contestation, public authorities highlight the health insurance vouchers plan, as if it was a new measure.

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

The implementation of the Universal Health Coverage mechanism (CMUC) four years ago  (supplementary insurance free of charge for to low income people) has raised new debates about the role of voluntary health insurance.

First, the reform clearly acknowledges that compulsory health insurance has not been sufficient to guarantee fair access to care for poor people, particularly for dental and eye care, for which out-of-pocket payments are very high.

Second, it recognizes that voluntary health insurance needs to be subsidized for those who cannot afford it. As a result, voluntary insurers have gained a new legitimacy in the system.

These developments have led to further proposals for changing the organization and regulation to the health system. For example, a report commissioned by the Ministry of Health and published in April 2003 advocates the creation of a "general medical coverage" which would include public insurance and voluntary private insurance - the latter being subsidised up to a certain level of income, above the ceiling of CMU. This idea of a public subsidy to purchase voluntary insurance has been strongly supported by the mutual benefit movement, which is an important force in the French political life.

The health insurance vouchers plan is the outcome of this debate (although the mutual benefit movement advocates a larger reform which would eventually substitute individual subsidies to purchase health insurance). The underlying idea is also that the contracts eligible for the voucher plan should be in line with the regulation objectives of the compulsory insurance scheme. Today, the incentives given on the demand side are often offset by voluntary health insurance.

The idea of public subsidy for "virtuous" VHI contracts also goes with a more global debate on the role of voluntary health insurance in the health system. Here the not for profit mutual insurance movement and the private for profit insurances have different views. The former proposes to manage the health care system jointly with the compulsory health insurance funds, whereas the latter would rather separate the fields of competence and have full responsibility for some areas such as dental and eye care. What is clearly emerging is the idea that voluntary insurers should have access to medical information on claims in order to be better managers of care. So far, they have had basically no information at all : they have been strictly linked to mandatory coverage and passive buyers of health care.

It is worth noting that commercial insurers seem to have withdrawn from the debate. A few years ago, some of them strongly supported the introduction of a competitive system of health insurance, along the lines of the Dekker-Simons reform in the Netherlands. One of them proposed to build up a network of selected providers to serve a population enrolled on a voluntary basis, with a risk adjusted capitated payment for each patient enrolled. This proposal was refused by the Government of the time and since, private insurers appear to be much less involved in policy debate.

Initiators of idea/main actors

• Government

Approach of idea

The approach of the idea is described as:
amended: Strong reinforcement of the idea by through a law instead of through an administrative memorandum

Stakeholder positions

In order to favour the access to voluntary health insurance for the poor individuals, the health insurance vouchers plan introduces some more subsidies on the individual voluntary health insurance contracts. Initiated by the mutual insurance association (FNMF), the tax credit for the purchase of an individual voluntary supplement coverage may in the future be extended to a larger part of the population.

In this context, it could redesign the role of collective contracts that are much more generously subsidized through large tax credits (until now at least). And in this configuration, it is quite obvious that other stakeholders of voluntary health insurance (commercial (for profit) insurance companies and non-profit provident institutions with market shares respectively of 24% and 18% of voluntary health insurance market) that are more involved in the collective insurance market could affect the equilibrium and reduce the rough consensus around this measure. From now, there is an accumulation of the different measures without a complete plan redesign in which the tax credit could substitute at least a part of the redistribution run through the collective health insurance contracts.

Actors and positions

Government
Government	very supportive		strongly opposed
Parliament	very supportive		strongly opposed
Payers	very supportive		strongly opposed

Influences in policy making and legislation

Not relevant.

Legislative outcome

success

Actors and influence

Government
Government	very strong		none
Parliament	very strong		none
Payers	very strong		none

Positions and Influences at a glance

Adoption and implementation

Not relevant.

Monitoring and evaluation

This measure will probably be evaluated only in the context of the evaluation of the CMU that is planned by the law. Thus this evaluation is run by the "fonds CMU" (the institution in charge of managing  the CMU plan called).

Results of evaluation

Not relevant.

Expected outcome

The introduction by a law instead of an administrative memorandum has mainly reinforced the health insurance vouchers plan. Moreover, the stunt advertising on this policy will probably help to the success. On one side, the supply by the public local fund is now warranted and due to the advertising, one can expect that individuals will apply to the vouchers plan more often and thus, one can expect a higher impact with this "new version" (whatever the circumstances it is difficult to get a worse result!).

By way expanding the proportion of individuals with supplementary health insurance coverage through subsidies for individual contracts, the equity in the funding of supplementary health insurance may be reinforced as collective contracts were already generously subsidized. Now, one can ask if the health insurance tax credit plan has to be extended or not ?

Impact of this policy

Quality of Health Care Services	marginal		fundamental
Level of Equity	system less equitable		system more equitable
Cost Efficiency	very low		very high

References

Sources of Information

La CMU complémentaire

www.ameli.fr/211/DOC/706/fiche.html?page=7

Rapport sur la gestion de l'assurance maladie

www.ameli.fr/pdf/1456.pdf

La CMU: l'assurance maladie pour tous

www.ameli.fr/pdf/722.pdf

LOI n° 2004-810 du 13 août 2004 relative à l'assurance maladie

www.legifrance.gouv.fr/WAspad/UnTexteDeJorf?numjo=SANX0400122L

Author/s and/or contributors to this survey

Carine Franc

Suggested citation for this online article

Carine Franc. "Health Insurance Vouchers Plan". Health Policy Monitor, October 2004. Available at http://www.hpm.org/survey/fr/a4/4