France’s Health Minister and Minister for Public Accounts have informed the FFA, the FNMF and the CTIP of their intention to tax complementary insurance companies known as “Organismes Complémentaires d’Assurance Maladie” (OCAMs) to the tune of EUR 1 billion in 2020 and EUR 500 million in 2021 for lower healthcare expenses incurred by the French during lockdown.

The members of the FFA are surprised and regret this project, which is based on an incomplete assessment of the effects of the crisis.

While insurers did indeed experience a drop in healthcare spending during the lockdown, many uncertainties remain regarding the catch-up of healthcare consumption and the financial impacts of the crisis. The OCAMs are already seeing a sharp increase in expenditure, particularly with regard to dental care, since the end of the lockdown. They will also be affected by the economic deterioration following the expected sharp rise in unemployment, which will impact their expenses due to their obligation to maintain healthcare and providence coverage for the unemployed for whom there are no longer any contributions collected. The impact of arrears due to business failures will also worsen this situation. All these effects cannot be assessed until the beginning of next year, but they will already have an impact on the results of the OCAMs from 2020.

Furthermore, this new taxation, if confirmed, would further increase the taxation of healthcare policies, which should be considered a basic necessity. French healthcare policies are already among the most heavily taxed in Europe, while many countries, such as Germany, exempt them.

In this context, it therefore seems premature to increase the OCAMs’s expenditure even further, which will ultimately weigh on their retail and corporate policyholders.

During this crisis, insurers have shown that they know how to fully support our fellow citizens, with more than EUR 2.3 billion of exceptional measures rolled out beyond their policies”, said Florence Lustman, President of the Fédération Française de l’Assurance. “We very much regret that this draft contribution does not take the time to assess the real impacts of the crisis on complementary insurance”, she added.