Health Care: Health Insurance Providers Remain Under Pressure Amid Rising Expenses

With the surge in healthcare and medication use, supplemental health insurance plans in France are under pressure. In their latest study, Cercle de l'Épargne/AG2R la Mondiale, experts explain why these plans remain essential to ensuring access to healthcare for all French citizens.
 

In 2022, spending on health care and medical goods (CSBM) totaled 235.8 billion euros, or 8.9% of gross domestic product (GDP).
Between 1950 and 2022, health care spending in France grew at an average annual rate higher than that of GDP. As a result, the share of CSBM in national output increased 3.4-fold over the period, rising from 2.5% to 8.9% of GDP.
Health insurance is the primary source of funding for healthcare and medical goods (CSBM). In 2022, it covered 79.6%.
Supplemental health insurance providers rank second, contributing 12.6% of expenditures. Households’ out-of-pocket expenses account for 7.2% of the total. Over the past ten years, the share borne by households has decreased by 1.6 percentage points and that of supplemental health insurance providers by 1.0 percentage point, in favor of increased funding from the National Health Insurance system. This overall picture is accompanied by transfers between the various healthcare stakeholders depending on the nature of the expenditures.
 

It’s no surprise that for several years now, supplemental health insurance has been a major concern for French households. Indeed, as the use of medical care and products continues to rise, supplemental insurance plays a crucial role in covering these expenses.

After a period marked by mergers and acquisitions, the health insurance sector is seeing a slowdown in this trend. According to the ACPR, the number of organizations authorized to conduct insurance operations has decreased in recent years. This trend can be attributed in particular to stricter prudential regulations and the recent stabilization of the market.
 

Another notable trend is the faster growth in benefits compared to premiums. In 2022, benefits paid by supplemental insurance providers increased by 3.8 percent, while premiums rose by only 2.9 percent. This situation highlights the financial challenges insurers face in maintaining a balanced budget.
 

Despite these challenges, insurers continue to play a crucial role in reimbursing healthcare expenses. In 2022, 81% of premiums were paid out as benefits to policyholders. This proportion remains high, demonstrating the importance of supplemental health insurance in the French healthcare system.
 

Finally, the financial results of the supplemental insurance providers remain broadly in balance, although some providers are facing difficulties. Indeed, the economic climate and the cost shifts imposed by the government are having an impact on the sector’s profitability.