To stop the “unsustainable” widening of the Social Security deficit, the Court of Auditors proposes to restrict compensation for work stoppages by Health Insurance and reduce certain exemptions from social contributions.
The government’s current forecasts “show a continuous” and “uncontrolled” deterioration of the Social Security deficit, “which would reach 17.2 billion euros in 2027, with no further prospect of stabilization and even less of a return to balance “, underlines the Court of Auditors in his report of application on Social Security financing laws, presented this Wednesday, May 29.
Among its recommendations to try to regain control, the Court of Auditors suggests tackling work stoppage compensation expenses, “which increased by more than 50% between 2017 and 2022 to reach 12 billion euros in the general regime”. It recommends “going further in the fight against work stoppage fraud and in the control of doctors’ prescriptions”, and to simplify existing regulations. Among other “possible measures”, the Court cites the non-compensation by Health Insurance for interruptions of less than 8 days (470 million euros less expenditure), the increase to 7 days of the waiting period (950 million euros less expenses), the reduction to two years (compared to three today) of the maximum duration of compensation (750 million euros less expenses)…
Addressing certain exemptions from social security contributions
In general, it is necessary to “better distribute the burden” of compensation for work stoppages between Social Security, companies and policyholders, summarizes the Court. It also proposes to restore revenue to Social Security by tackling exemptions from social contributions on salary supplements.
These possibilities available to employers to supplement the remuneration of their employees (financing supplementary health insurance, welfare and supplementary retirement, direct aid such as meal vouchers, sharing of value such as profit-sharing or participation, etc.) continue to grow, to the detriment of salaries… and the social contributions based on them, explains the Court of Auditors. The exemptions applied to them “result in a loss of revenue for Social Security which can be estimated at 18 billion in 2022”, according to her. According to the institution’s figures, salary supplements in the private sector amounted to 87.5 billion euros in 2022, adding on average 13.2% to the base salary.
The institution will propose detailed avenues for savings on health insurance at the end of June, its president Pierre Moscovici said on Wednesday. In this “expenditure review” requested by the Prime Minister, the Court will suggest “concrete savings avenues”, he indicated. “There are significant deposits”, but it will take “political will” to implement them.
Other savings avenues presented on Wednesday: better regulation of innovative anti-cancer drugs, to reduce their prices more quickly. The Court suggests the establishment of a network of independent research organizations to evaluate the costs and benefits induced by new drugs. In particular, it is necessary to be able to “renegotiate the price of innovative anti-cancer drugs when studies […] show results lower than those expected”, notes the Court. Health Insurance expenditure for these drugs “reached 5.9 billion euros in 2022, 2.4 billion after deduction of discounts paid by laboratories”, according to the Court.