Sickness benefits down, contributions up

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In October 1999, a "quadripartite" meeting of those involved in Luxembourg's sickness insurance funds was unable to agree on ways of balancing the funds' deficits for 1999 and 2000. Thus, in November, the general meeting of the Union of Sickness Funds took the decision to reduce certain benefits and raise contribution rates. Trade unions have announced that they will be seeking to have the decision reversed.

It was announced in early October 1999 that Luxembourg's sickness insurance funds would be posting a deficit of LUF 737 million for 1999, and a likely LUF 2.1 billion deficit for 2000. The main sickness funds are:

  • the blue-collar workers' sickness fund (Caisse de maladie des ouvriers, CMO);
  • the private sector white-collar workers' sickness fund (Caisse de maladie de employés privés, CMEP);
  • the civil servants' and public sector white-collar worker' sickness fund (Caisse de maladie des fonctionnaires et employés publics, CMFEP); and
  • the the self-employed workers' sickness fund (Caisse de maladie des professions indépendantes, CMPI).

The funds come together under the umbrella of the Union of Sickness Funds (Union des Caisses de Maladie, UCM), which has overall responsibility in all matters, subject to those competences that lie with individual funds (LU9711129F).

Since the news of the deficit in the sickness funds emerged, trade unions have been almost unanimous in pressing the state to make good the deficit, arguing that a number of political decisions are to blame. The unions cite government "inertia" in the face of a surplus of doctors, the fact that the costs of investment on infrastructure fall on sickness funds, and the absence of significant reform in the field of disability pensions as examples of causes of the additional expenditure that the funds have incurred.

On 29 October 1999, the Prime Minister reiterated that it is not up to the state to make good the social security deficit. He believes that the four partners - service providers (such as hospitals, doctors and pharmacies) trade unions, employers' representatives and the state - should be consulted and take part in discussions with a view to reaching an agreement on covering the deficit. To this end, the Minister for Social Security was given the task of finding a solution "through consensus and dialogue" at a meeting of the "quadripartite" committee bringing together the four parties, scheduled for 20 October 1999.

Quadripartite talks fail to deliver

The quadripartite committee was unable to resolve the dispute at its 20 October meeting. The unions stressed the state's healthy financial situation, and insisted that it should make good the deficit. The employers' associations argued that there were many political, social and medical factors behind the deficit, and that initiatives aimed at absorbing it should be shared out among all the parties concerned. The employers agreed with a moderate increase in contributions and a number of savings, and stressed that recipients, too, should contribute to the restoration of financial stability.

Notably, the Federation of Craft Workers (Fédération des artisans) stated that sickness insurance will need to be reformed in the near future, with the aim of taking the structural measures needed to keep the system running, and thereby enable the population to obtain insurance providing high-quality medical care within sustainable financial limits.

Measures for reining in expenditure

On 10 November, there was a lengthy general meeting of the UCM. The government promised to increase the state contribution to 37% of healthcare benefits, an increase that is estimated to cost over LUF 1 billion for 2000. As for the deficit, there were no concessions by any parties, save for that made by the government, and the UCM president thus called for a vote on a proposal aimed at ensuring budgetary stability.

The proposal involved a number of cuts in benefits, aimed at saving LUF 300 million. There will thus be increases in recipients' contributions towards a number of benefits, as follows:

  • a 5% contribution towards out-patient treatment and services (hitherto paid for out of sickness funds);
  • a 20% contribution towards certain forms of speech therapy treatment, to be introduced in 2001;
  • a 10% contribution towards the cost of thermal cures;
  • an increase in the contribution towards daily non-medical in-patient expenses, from LUF 225 to LUF 365, if cared for in a clinic or rehabilitation centre;
  • a reduction from 80% to 78% in the proportion of the normal cost of medicine met by funds; and
  • an extension from two years to three of the time that elapses between the issuing of new spectacles, except where there is a major change in eyesight.

At the same time, contributions to sickness funds (to pay for benefits in kind) will rise from 5.14% to 5.2% of pay for all groups except blue-collar workers, whose contributions will rise from 4.2% to 4.7%.

Before the vote on the president's proposal, representatives of those covered by sickness insurance criticised the changes on the grounds that, in the absence of any concession from health providers, the impact of the various contribution increases and benefit cuts will fall solely on those insured (ie workers).

The representatives of employers, self-employed workers, farmers and the government voted for the proposal, while the representatives of insured workers voted against. The president's proposal was passed narrowly by 211 votes to 210.

Warning of action from unions

On the day following the vote, the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafts-Bond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) formally protested against what they saw as a "body blow from the employers and government aimed at workers". More than anything else, they condemned the perceived absence of any dialogue before the decision was taken, and were highly critical of the fact that service providers do not have to make any contribution towards balancing the books of the sickness insurance funds.

Both trade unions, possibly in tandem with the General Public Sector Confederation (Confédération Générale de la Fonction Publique, CGFP), plan to draw up an action plan aimed at having the new measures reviewed.


The question of the Union of Sickness Funds deficit surfaces from time to time, and unfailingly arouses great interest among those concerned. The deficit was corrected in 1997 through an increase in contribution rates that sparked off a storm of protest from employers and the government (LU9712135N), while a reduction in rates in November 1998 met with general approval (LU9812184N). At the present time, it is the employee representatives who are dissatisfied.

It might be asked why the four partners are not discussing the structural measures necessary to keep the scheme afloat in a more serious, detailed fashion, instead of waiting until the next time that the issue comes up in October 2000 and then simply taking part in a vote, the result of which cannot be predicted. (Marc Feyereisen)

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