Complementary health insurance: a 5 billion windfall for employees?

The extensive use of complementary health insurance and competition between complementary health insurers and personal protection insurers have had the immediate effect of lowering premiums whilst keeping the same benefits. This has been revealed in a study conducted by Gerep over the period from 2015 to 2021, based on the Tripalio database. Strangely enough, some reports are suggesting putting an end to free competition so as to reduce the cost of healthcare and give insured persons more purchasing power, so let us take a look at some facts.

Objective: analyse the effects of opening up to competition in 2015

Historical reminder… In June 2013, the French Constitutional Council came out against the system that meant that a single insurer was designated for a professional branch and all affiliated companies. The objective was simple and clear: give companies freedom of choice.

While there are still opponents of free competition, we have tried to estimate what effect the ending of these designation clauses has had on premium rating. This is a difficult task. So the results of our study should be taken with a pinch of caution. The study is not ex-haustive: it covers the 12 million employees in the branches for which INSEE publishes staff numbers. Secondly, the notion of rating is complex: it is like comparing apples and oranges, mixing, for example, policies for the employee alone or their family, and ignoring differences or improvements in policy cover. Moreover, above a certain number of em-ployees, insurers tend to adapt rates to the claims experience of that particular company.

A significant fall in premium rates between 2015 and 2016

However, the objective and consistent methodology used in our study has identified some noteworthy trends. In our sample, the opening up to competition between 2015 and 2016 had the effect of sending rates plummeting. Our calculations show a drop in average mon-thly contributions, from 54 to 48 euros over this single pivotal year, i.e. 72 euros per em-ployee per year. Over recent years, the figures have been around 49 to 50 euros of ave-rage monthly contribution. In other words, the market has returned to normal, taking ac-count of the inflationary trend in health expenditure, but without rebounding or brutally com-pensating for the immediate gain from the introduction of competition. Taking something of a risk, we could estimate the annual gain for employees in our sample to be close to one billion euros. Thus, over the period 2015 to 2021, nearly 5 billion euros of purchasing power has been restored, while over the same period the consumption of medical care and at-tendant products increased by 10%.

Evidently: free competition drives down prices

With health expenditure rising and policy cover improving – particularly as a result of the 100% healthcare reform[1] – complementary health insurers have been trying to soften premium hikes. Indeed, competition does not allow a private sector player the luxury of building in safety margins at the expense of its customers, even in the most uncertain situations. Would this be the case with a captive market?  

Today, voices can be heard questioning the benefits of competition in complementary social security coverage. The HCAAM (High Council for the future of health insurance), in its report, even mentions the possibility of reducing competition by creating a large monopolistic social security system excluding all other insurers. In the face of this, our study has only one aim: to establish, on the basis of a specific event, that encouraging free competition in complementary health insurance has indeed had positive effects on insured persons’ purchasing power. This is an obvious statement, but one that needs to be repeated over and over again, given the current environment.

[1] la réforme du 100% santé – intended to enable all those covered by French health insurance to access dental, optical and auditory care, which is often very expensive, more easily.      

To obtain the entire study, contact us : marketing@gerep.fr