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2 October 2015

The Social Security Financing Bill for 2016

The social security deficit has decreased in 2015, and is set to fall to below 10 billion euros in 2016, its lowest level in 10 years. This deliberate policy of rebalancing the accounts is accompanied by major structural measures aimed at supporting economic activity, continuing the transformation of the health system and protecting the entitlements of people with social security coverage.

Content published under the Government Valls II from 2014 26th August to 2016 11th February
 
The social security deficit has been halved: 21 billion euros in 2012, 13 billion in 2015 and 10 billion in 2016. This rebalancing is the result of the policies being pursued: pension reform, reform of family allowances and promotion of the use of generic medicines. In 2019, the general social security system will therefore be in surplus again, by 1.8 billion euros. At the same time, the entitlements of people with social security coverage will be strengthened, including a pledge not to reduce reimbursements or introduce health insurance excesses; universal healthcare coverage; new complementary health insurance contracts for the over-65s; financial assistance with health insurance costs for employees on very short fixed-term employment contracts; and the nationwide roll-out of the guarantee against unpaid child-support allowances.
 

Decrease in the social security deficit thanks to the policies pursued


In 2015, the social security deficit has fallen to €12.8 million:
  • This is a €400 million improvement on 2014; the general social security system deficit is down by €700 million to €9 billion, having fallen by 2.8 billion between 2013 and 2014.
  • This is better than expected: €600 million less than initially planned;
  • The improvement is attributable, in particular, to the old-age and family branches of the social security system: the old-age branch deficit is down by €600 million and is nearly in balance at -€0.6 billion; the family branch deficit is down by over €1 billion to -€1.6 billion, compared with -€2.7 billion in 2014;
  • For the first time since 2002, deficit reduction has ensured a real-terms reduction in total social security debt in 2015, a debt which should still further fall in 2016. 
The rebalancing of the social security budget will continue in 2016, under the Social Security Financing Bill (PLFSS - Projet de loi de financement de la sécurité sociale) introduced by Marisol Touraine and Christian Eckert:
  • The deficit in the general social security system and the old age solidarity fund (FSV - fonds de solidarité vieillesse) will be below €10 billion, at €9.7 billion, its lowest level in 10 years. It will return to a level not seen since before the crisis in 2008, and half what it was at the beginning of the current five-year presidential term. The general social security system alone will have its lowest deficit since 2002;
  • The pension system will have a slight surplus of €500 million in 2016, for “the first time since 2004” as Marisol Touraine explained. In 2014, it was in deficit by €1.2 million;
  • The family branch will nearly balance in 2016, at around -€800 million.
  • The target in the healthcare branch is to return to a deficit of €6.2 billion, a reduction of €1.3 billion.
€3.4 billion of savings will be made in four strategic areas: the price of certain medicines will fall (saving €550 million) and the use of generic drugs will be promoted (€400 million); hospital expenditure will be optimised, especially purchases in hospitals and their logistical services (€420 million); the shift towards outpatient care (shorter stays in hospital) will continue (€465 million); as will the fight against inappropriate prescriptions (€400 million);

The social security cover enjoyed by French people is not being jeopardised: parliament has not voted to reduce reimbursements or to introduce health insurance excesses. 

In 2019, the four branches of the general social security system will once again have a surplus, of €1.8 billion, thanks to the policies in place.
 

Structural measures aimed at supporting economic activity


This deliberate policy of rebalancing the accounts is accompanied by major structural measures aimed at supporting economic activity, continuing the transformation of the health system and strengthen the entitlements of people with social security coverage:

Measures aimed at reinforcing access to healthcare are to be developed by means of the 2016 Social Security Financing Bill (PLFSS):
  • The reform of universal healthcare coverage is aimed at simplifying the procedures for people to claim their reimbursement entitlements;
  • Less expensive mutual insurance contracts will be put in place for the over-65s;
  • Workers employed on a succession of very short employment contracts will also be able to ask their employers to make a financial contribution towards healthcare cover;
  • Minors will be given greater access to contraception and further steps will be taken to prevent childhood obesity.  
With regard to the family branch:
  • Reform of family allowances, now means-tested based on household income.
  • The guarantee against unpaid child-support allowances (GIPA - garantie contre les impayés de pension alimentaire) will be rolled out nationwide by the spring. This scheme was piloted for one year and will eventually apply to 90,000 families. 
The implementation of the Responsibility and Solidarity Pact continues. Support measures for companies will reduce labour costs by a total of €33 billion in 2016, ten times more than in 2015, and €41 billion in 2017, as announced by the French President.
  • The further reduction in family allowance contributions for all salaries lower than 3.5 times the guaranteed minimum wage will thus achieve €4.5 billion in savings in 2016 and will be applicable from 1st April.
  • Phasing out the “Corporate Social Solidarity Contribution” (C3S - Contribution Sociale de Solidarité des Sociétés) will generate further savings of €1 billion in 2016. 80,000 SMEs will be totally exempt (maximum saving of €25,000). 
The rate adjustment mechanisms for all social security benefits will be reviewed, and grouped together at two dates (either 1st April or 1st October). They will now be calculated according to actual inflation rather than projected inflation. This reform represents a saving of €500 million.