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Developing long-term care insurance in France

2014 Conference Presentation

(Inter)national systems France

2 September 2014

Developing long-term care insurance in France

Emmanuelle Brun, CNSA, France


In France, total spending for long term care represents around 2% of GDP in 2011. The 2003 heat wave killed about 15,000 older people and the societal shame arising from this event ensured support for the nationwide sacrifice of a paid public holiday to finance the public allowance (“APA”), since 2002. More recently, an increased Social Security tax on pensions was voted in the 2013 budget.

The French President Mr. Hollande has recently proposed legislation to increase “APA” benefits; if voted, this legislation would include lowering copayment requirements for those with greater needs as well as topping up benefit amounts. Public benefits are universally available to people age 60 and older, although only the poor are fully covered. The benefit is heavily income-adjusted and varies according to disability severity. Thus, private funding supplements public funding. For those who cannot cover these costs from income and savings (including home equity), locally-run means-tested social assistance is available. Private LTCI is not expected to save public monies, or to fully protect against catastrophic out-ofpocket costs. Indeed, insurers promote private LTCI as a complement (rather than an alternative) to a basic “floor” of universal public coverage; it is also meant to reduce gaps in coverage for dependent older people who are not poor enough to have their costs fully covered by the “APA” or means-tested social assistance.

The French market for private LTCI is large, with approximately 5.7 million policyholders in 2012 out of a total population of 66 million. The individual market grew by 40% from 2002 to 2012. Policies pay out cash. French insurers enjoy relatively healthy finances and appear quite optimistic about the prospects for private LTCI in France, seeing disability in an aging population as a manageable risk. French ministries are more cautious on this issue. It is not clear, however, what larger role French LTCI companies envision for their products, given concerns about the adequacy of existing private LTCI benefits in France. Most people (60 percent) are covered through group policies that pay out an average benefit of only 150 euros per month. It is also currently unclear whether they will carry these policies over to their post-retirement years, when they are at greatest risk.

Toward a public and private partnership (PPP)? Public benefits delivered by local social services follow a logic of total response to current needs, in the framework of aid eligibility defined by the law, i.e. a logic of compensation of “chronic disability”. On the other hand, insurance organizations subscribe rather strictly to a logic of benefit eligibility, based on contractual terms established beforehand: insurance contracts, and associated assistance, belong to the logic of long term financing and services. The utilization of different tools between the public and private sectors for the evaluation of personal situations and for determination of eligibility constitutes also a major obstacle toward public and private cooperation.

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