Government Examining Health Insurance Concessions
Whilst the Government continues to maintain a tough line on ending the general right of early retirees to the State health insurance system (CMU), potential exceptions to the rule are now being discussed, according to key sources with whom we have spoken in the last few days. In particular, a review is taking place of possible concessions to existing expats unable to obtain private health insurance because of major illness or disability. A circular to local health authorities is being prepared, which will also concede that those who have been living in France for at least five years will be granted access to the CMU. The Government have been forced to make this concession, because doing otherwise would be in clear breach of European laws. However, it appears unlikely that there will be a general exemption for those suffering for a major illness or disability. Those seeking to join the CMU on health grounds will need to demonstrate that they have been refused private health insurance because of the condition. It may well be, therefore, that such cases are granted access to the CMU for the treatment of the major illness or disability, but required to take out private health insurance for other treatment. The power to make decisions on individual cases will be granted to the local health authorities (CPAMs), but the level of discretion to be afforded to them has yet to be determined. Local health authorities have a strong tradition of independence, so we suspect that they will want to take their own view of how the new rules will apply. There is no timetable for drafting and release of the new guidance, which will need political ratification.
We appreciate the sensitivity and importance of this information to those who may be in this position and we do not want to raise false hopes. Accordingly, we are going to need to await publication of the new circular before we can be fully confident that the sentiments we have heard expressed by officials will be turned into concrete reality at a political level.
Nevertheless, if things do develop as we hope, a light does appear to be appearing at the end of the tunnel for many hundreds of expats who face having to sell up and go home, simply because they are unable to obtain private insurance cover.
Private Insurance Premiums Will Come Down
There is no change in prospect for other early retirees unable to gain access to the CMU, who would need to take out private or employment based health insurance (after their E106 has expired). We have noted the eagerness with which a number of high profile health insurance brokers have been presaging the end of State health cover, but we would urge caution before you rush to sign a policy without looking at the small print - notably the extent of the cover and the quality of the underwriting insurers. Peter Owen of Expathealthdirect is an independent healthcare advisor based in France. He counsels that 'although it would be prudent to investigate full health insurance policies, it is not a time to panic, particularly for those with pre-existing conditions where there is hope that affiliation via CMU will continue. French insurers will be keen to enter this expanding market, as well as those established in other EU states.'
Appeal Against the Decision
There are already signs that some expats have received notification from their local health authority that their CMU affiliation will not be renewed. If you should happen to be one of them, we would urge you to make an appeal against this decision to your local CPAM, if necessary through to the French social security tribunal. A right of appeal is enshrined in law, and appeals are going to be a critically important part of any campaign to blunt the impact of this new law, notably for those with a pre-existing medical condition. We have tracked down one of the very few French avocats who specialise in health and social security matters.Caroline Legal has represented many clients all over the country in front of local health authorities and the French social security court. She is able to assist, on an individual or collective basis, with appeals on behalf of expats who may be refused access to the CMU. She can be contacted at caroline.legal@caramail.com.
Employment Based Health Insurance
If you are in work, or you are self-employed, you will pay into a health insurance fund as part of your social security contributions. France adopts a wide definition of what constitutes a ‘business’ activity, and turning an hobby into a small home based business may be one strategy for getting into the State health system, as well as providing an income to supplement an early retirement pension. Despite the reputation of France as an unsympathetic country in which to run a business, in fact only the rich or badly advised pay a high level of social security contributions. Whilst a minimum contribution is always payable, if you only have a small turnover or profit, then expect to pay no more than around €1500 a year. You would pay health and social security contributions on the basis of your business income or turnover, not your early retirement pension. Even if there were no sales in the opening year or two, provided you can produce evidence of some production and marketing activity, the authorities are not going to bother you too quickly. Running a small business in France could also bring social and psychological benefits. Whilst you may dream of spending your days in the hammock, the novelty can wear off, and loneliness and boredom can easily set in. You can read more about running a business in France in our Guide to Starting and Running a Business in France.
State Health Cover is Not Free
Once you have lived in France in a 'regular' manner for five years, then it seems you will be able to join the CMU, unless otherwise in employment. Contrary to the many newspaper reports, affiliation to the CMU for early retirees is not 'free'. It is a contributory system. Only those living at a very low subsidence level, or suffering from a major long-term illness, are treated without having to pay. Everyone else pays 8% of their income above a €8600 threshold for health care. In addition, they also pay up to 11% social welfare levy, which grants no right to health or social security benefits, but is simply used as contribution towards clearing the debt burden of the French Government.
In short, early retirees pay around 15% of their income to affiliate to the State health insurance system.
Neither is the new law being driven by EU directives, as the French Government has argued. The EU backdrop is little more than a flag of convenience for the Government to introduce changes to tackle the financial crisis facing the health service in France, including an attack on the level of fraud in the system, by both French and foreign nationals alike.
Indeed, the Government has already indicated that it wants to break with the tradition of solidarité of the past, and introduce a greater degree of individualised health insurance contracts. In the future, it may well be not only expats who are going to be concerned by these changes, but also French nationals.
Previous articles on this subject:
Too Early to Panic on New Health Rules - 14th Sept 07
Rule Changes on Health Cover for Early Retirees - 3rd Sept 07
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