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France, Jul 27, 2017,  by Allianz Partners Business Insights

Health insurance: Price increase for individual contracts

The price of health insurance policies has gone up, which is a problem for the 29 million people in France who do not benefit from group health insurance. 

 

In January 2016, the ANI (France's National Inter-Professional Agreement) obliged employers to offer group health insurance to their employees. Nevertheless, 45% of the French population − around 29 million people − do not currently benefit from employer-paid health insurance. This concerns civil servants, the self-employed and the military, as well as jobseekers, retired workers and students. French L'UFC-Que Choisir has created a health insurance compare tool to help them choose an appropriate policy.  

Up to an 8% increase

The L’UFC-Que Choisir compare tool showed an increase of 1.5% in the price of identical contracts over the space of one year, which represents an increase of €11/year, giving an average premium of €60/month. However, this average is not representative, since a third of insurance companies have increased their prices by more than 4%; 6% for April and Aviva, and up to 8% in the case of Swisslife and Diffusion Santé.

Conversely, 15% of companies have lowered their prices, such as Mutuelle Mieux Être, who have reduced their charges by more than 8%. But, on average, the few contracts to have become cheaper have only been lowered by 3 to 4%.

L’UFC-Que Choisir reminds users that its compare tool does not consider the policy-holder's age, which has a significant impact on the cost.

As explained by Vincent Harel, Deputy Manager for Health Insurance for insurance company Mercer, "Almost all individual health insurance contracts have premiums that change according to the policy-holder's age. Though this change is not always linear, the prices increase by between 1 and 2% every year on the basis of this one criterium." This increase is significant after the age of 60, given the heightened health risks.

Which policy to choose when you retire

When you retire, a French law allows former employees to conserve their health insurance policy, if it was previously organised by their employer. In order to do this, they must send a letter by registered post to the insurance company concerned within 6 months of their retirement.  

L’UFC-Que Choisir recommends taking advantage of this right in order to protect yourself from the significant jump in individual health insurance premiums after the age of 60 (even if the premiums remain stable in the first year, they can rise by 25% the second year, 50% the third, etc.)

However, you need to take into account the fact that, once you retire, you must also pay the employer's share of your policy. L’UFC-Que Choisir explains that a newly-retired person who used to pay €50 per month and whose employer paid €50 per month will now have to pay €100/month for the first year, but if there is a 25% increase in the second year then they will have to pay €125/month, then a 30% increase in the third year would make it €150/month…

This would eventually mean that an individual contract would be a more economical choice.

 

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