Although the legal reserve for sickness and maternity insurance currently covers the , the Luxembourg ministry of health and social security acknowledged that this trend is unsustainable and requires urgent reforms. In a written exchange with Paperjam on Monday 16 December 2024, the ministry emphasised the need to explore both legal and regulatory measures to ensure the system’s long-term financial viability.

Were you aware at the start of the year that maternity and sickness insurance expenses for 2024 would exceed revenues? Has the ministry taken any steps to address this?

“The way revenues and expenses of the sickness and maternity insurance are reviewed is set by law,” replied a spokesperson for the health and social security ministry.

“In accordance with article 80 of the social security code, the quadripartite committee brings together on a yearly basis all the stakeholders involved in the governance and operation of the sickness and maternity insurance. These are members of the government, representatives of professional organisations of employees and employers represented at the level of the board of directors of the National Health Fund (“Caisse nationale de santé” or “CNS”), as well as representatives of healthcare providers likely to hold discussions with the CNS to conclude agreements (“conventions”). Based on a report prepared by experts, the committee reviews the financial situation of sickness and maternity insurance and decides to take appropriate measures whenever required by law.”

“To answer your question, it is important to step back and understand that this is not a new paradigm. Looking at the period 2018 to 2021, revenues increased at that time already by about 5.9% whereas expenses were up by 8.0%. This trend has continued until 2024, with the exception of 2023 which was impacted by non-recurring items, and projections show that this negative trend is expected to continue.”

“The quadripartite committee meeting on 6 November 2024 has taken notice of the experts’ presentation and decided to prepare a set of possible measures for the next meeting to be held in May 2025. Among these measures could be some changes to be brought at the level of the legal basis but there was also a commitment to deepen discussions with the social partners and healthcare providers.”

How serious do you consider the situation and what immediate actions are being considered to address the deficit?

“The deficit (“solde des opérations courantes”) for 2024 is €37.9m and is expected to further deteriorate in 2025, reaching €160.7m. While the legal reserve accumulated over the past still permits coverage of such deficits, it is clear that this negative trend is not sustainable, and it is time to address the situation,” said the spokesperson.

“At the last quadripartite committee meeting, the ministry announced that it would start working on two immediate actions to strengthen the financial situation of sickness and maternity insurance. The objective is to draft a bill that will focus on: i) cash benefits linked to the real cost of maternity, and ii) the costs of depreciation of investments in movable and immovable property in hospitals, insofar as they comply with hospital planning and have not been financed by public authorities.”

If the reserve fund falls below the 10% threshold in 2027, what are the legal implications? Are there automatic measures in place to mitigate this?

“The code of social security (article 28) sets the threshold of the legal reserve of the sickness and maternity insurance at 10% and there are also very precise measures foreseen not to fall below the threshold (article 80).”

“More precisely, based on a report established by experts, the quadripartite committee analyses the evolution of health revenue and expenditure and proposes measures to be taken at the legal, regulatory, conventional or statutory level in terms of health insurance to improve the efficiency of the health system. If the growth in expenses leads to a significant increase in the contribution rate, the quadripartite committee must consult together to propose savings to be made at the level of healthcare providers and an increase in contributions from insured persons. The committee can also recommend regulatory mechanisms if the volume of medical procedures deviates from the needs of the population and quality standards.”

If the reserve fund is exhausted by 2028, as projected, what impact would this have on the day-to-day operations of the CNS?

“As set by law and previously explained, the legal reserve cannot fall below the 10% threshold and measures are foreseen to prevent this to happen,” said the spokesperson.

Is the ministry considering any measures to reduce expenses within the social security system? If so, which areas are being targeted?

“As already highlighted, we will follow a strict governance with discussions and conclusions taking place at the quadripartite committee meeting. Preparatory work will take place at the level of working group.”

Do you believe that meeting once a year with the quadripartite committee is sufficient or should these meetings be held more frequently?

“One quadripartite committee is set to take place by law which does not prevent to meet on a more regular basis depending on the situation. Considering the challenges ahead, the next meeting is meant to be held in May 2025 to monitor progress on the announced measures an discuss our roadmap.”