Healthcare costs may be much higher next year

Addactis forecasts a sharp increase in health insurance premiums for 2024, averaging 8%. In this context, brokers are coming out on top by offering guidance to clients. This helps clients find the best plans at the best prices.

For health insurance policies, the consulting firm Addactis forecasts a rate of increase well above inflation, which stood at 4.9% year-over-year in August. This comes as premiums for mutual health insurance plans have already jumped by nearly 5% this year compared to 2022.
 

On Thursday, September 21, 2023, the consulting firm Addactis presented a new analysis of trends in health and life insurance coverage. According to feedback gathered from a panel of insurers, premium increases in 2024 could range from 8 to 12.5 percent for group health insurance policies and from 3 to 6 percent for group life insurance policies.  

There are several factors driving this upcoming increase. In addition to the inflationary environment, Addactis specifically cites the shift in costs from the national health insurance system to supplemental health insurance plans. Reimbursement for dental care will indeed drop from 70% to 60% starting October 1, which the National Federation of French Mutual Insurance Companies estimates will result in an additional annual out-of-pocket cost of half a billion euros for mutual insurance companies.
 

This increase will inevitably affect the premiums paid by French citizens, the organization—which represents mutual health insurance and life insurance companies—recently warned.
 

Added to this is the 1.50-euro increase in the fee for medical consultations, which also takes effect next month. Dissatisfied with this increase—which they consider too small and believe was decided unilaterally by the health insurance agency—private practitioners have called for a strike beginning October 13.
 

Increase in healthcare utilization
 

These price changes linked to the reforms are occurring against the backdrop of a sharp rise in healthcare utilization in France in recent years. According to figures from the Drees, utilization of public and private hospital care increased for the third consecutive year in 2022 (+4.3%), following growth of more than 6% in 2021 and 2020.
“We are in a post-COVID context where overall health has deteriorated significantly: there is therefore a catch-up effect in healthcare consumption,” observes Cécile Paradis, a partner at Addactis.
 

The success of the 100%-reimbursed dental and hearing care packages, introduced in 2019, is also contributing to the rise in healthcare spending. But the bill tends to grow naturally year after year, primarily due to the aging population. While the French are certainly living longer, they are not necessarily in good health; as a result, they require more frequent—and often more expensive—care.
 

As a result, the sector now has “no choice but to pass on the increases,” emphasizes Céline Blattner, CEO of Addactis France. “Health insurance no longer has the margins needed to offset changes in future risks. However, insurers are subject to solvency requirements, so this is also in the best interest of policyholders.”