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French Mutuelles targeted to boost spending power

Customers will soon be able to cancel a mutuelle top-up health insurance contract at any time after the first year – a move expected to boost spending power by up to €1.2billion a year.

This is already in place for car and home insurance and was one of President Macron’s responses to gilets jaunes protest demands last December.

It was voted through despite opposition from mutuelles and unions and will apply by December 2020.

Currently, you can only cancel with one or two months’ notice before a contract’s anniversary date, except in set circumstances such as moving house or retiring.

This is not always a year after you took it out and is often fixed to January 1.

Mathieu Escot, spokesman for the consumer group UFC Que Choisir, said: “This stimulates competition and will force mutuelles to think again on premiums, which have risen 50% in 10 years.”

He said premiums average €700 a year and 21% of that relates to insurers’ running costs, which he said have risen disproportionately.

If they cut fees to the rates of five years ago, it would give a €1.2billion boost that would benefit older people who pay premiums of around €1,370 a year, he said. Mutuelle representatives said rises were due to government making firms pay a larger part of health costs.

They say the change means people might keep changing policies to have different procedures at the lowest costs.

It follows other measures to increase spending power, such as a reduction in social charges on pensions, a boost to the prime d’activité which tops up the pay of low-paid workers, and an increase (in some cases a doubling) of the prime à la conversion for drivers swapping an old polluting car for a greener one.

The government has also started to reduce taxe d’habitation for 80% of households, with a promise to remove it for all main homes by 2022.

Prime Minister Edouard Philippe says it all adds up to a boost of “average household spending power” by more than 2%, or €850, during 2019.

Mr Escot said Mr Philippe’s claim was not easy to verify as the impact was varied.

Thinktank ifrap said the claim uses figures from the OFCE forecasting office which do not mirror performance.

The Nouveau Parti Anticapitaliste said the statistics agency Insee reports a fall in spending power from tax rises, such as on fuel and tobacco.

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