No Social Security Budget? Lots of Problems to Solve

Allow Social Security to borrow

The absence of a dedicated budget would deprive the Social Security (or rather its treasurer, Acoss) of borrowing authorization to make ends meet and manage to finance benefits, despite its structural deficit.

Experts believe that this authorization should be given through a special law, or even by regulation, without the need for a new bill. However, public law specialists do not all agree on the best way to proceed with a resigning government.

There is still some time to resolve the problem, as the Social Security has - according to several sources close to the administrations concerned - a few months of reserves before having to borrow again.

On Monday at the National Assembly, the rapporteur for the Social Security budget, Yannick Neuder (LR), estimated that a rejection of the budget would leave "only a few weeks of cash" for public bodies to "pay pensions, reimburse care and finance taxes".

"Next March, who wants health cards to stop working?" he asked, a few minutes before the Prime Minister brought out Article 49-3, exposing himself to a motion of censure.

Setting hospital rates

Each year, the Social Security budget sets a national target for health insurance expenditure (Ondam), which provides, among other things, the financial envelope allocated to public and private hospitals for the year.

This envelope (105,8 billion euros in the draft budget of the Social Security 2025) then allows the government to calculate the remuneration of hospitals, in particular by setting the rates for care procedures. If this envelope is not determined, "there is no longer a solid legal basis" to do so, explained recently Dominique Libault, the president of the High Council for the Financing of Social Protection (HCFiPS).

Initially, the solution will probably be to renew the 2024 rates, "which is not very good news for healthcare establishments," he said.

Hospitals, which are in heavy deficit, estimate that they will need a 2025% increase in the 6 budget in 2024. In its budget, the executive planned for an increase of 3,1%.

Controlling the deficit

The absence of a financing law (LFSS) would also deprive the government of provisions intended to help it control the heavy social security deficit.

The latest version of the draft budget adopted by the joint committee (CMP) plans in particular to reduce exemptions from employer contributions by 1,6 billion euros, and to increase taxation on very sugary drinks, in order to provide the Social Security with new resources.

The budget also provides tools to slow down health insurance spending, for example through savings on medication, or by negotiating new price reductions with biologists, radiologists and approved taxis who transport patients.

Without this text, "the deficit in social security accounts would reach 30 billion euros next year," warned Budget Minister Laurent Saint-Martin before the National Assembly.

The version adopted in the CMP predicted a deficit of around 18,3 billion euros in 2025, compared to 16 in the initial version proposed in October by the government.

Retirees spared?

Under the Social Security Code, basic pensions are revalued each year at the beginning of January, indexed to the inflation recorded by INSEE (National Institute of Statistics) for the previous year.

To save 3 billion euros, the LFSS project planned to under-index them in 2025, at half the inflation rate, except for pensions below the minimum wage which were to receive a supplement in July.

Without this text, the law prevails and the increase in pensions will be automatically based on inflation, assure two experts on social security.

Reforms pending

Without the LFSS, a certain number of measures will have to wait for another legislative vehicle to be adopted, recalled defenders of the text on Monday: exemptions from old-age social security contributions for doctors combining employment and retirement, alignment of the calculation of agricultural pensions with those of the general scheme, papillomavirus-meningococcus vaccination campaign in middle school, direct access consultations with psychologists within the framework of Mon Soutien Psy...