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workers are effectively paying 18.8 percent of

The French system ranks at or near the top of

their income for health insurance. Finally, dedi-

most cross-country comparisons and is ranked

number one by the WHO.46

cated taxes are assessed on tobacco, alcohol, and

pharmaceutical company revenues.47

Although the French system is facing loom-

ing budgetary pressures, it does provide at least

In theory, the system should be supported

some level of universal coverage and manages

by these dedicated revenues. In reality, they

to avoid many of the problems that afflict

have not been sufficient to keep the program's

other national health care systems. However, it

finances balanced. The National Health

does so in large part by adopting market-ori-

Authority sets a global budget for national

ented approaches, including consumer cost

health care spending, but actual spending has

consistently exceeded those targets.48

sharing. Other aspects of the system appear to

In 2006, the health care system ran a €€10.3

reflect French customs and political attitudes

in such a way that would make it difficult to

billion deficit. This actually shows improve-

ment over 2005, when the system ran an €€11.6

import the system to the United States.

billion deficit.49 The health care system is the

France provides a basic level of universal

health insurance through a series of mandato-

largest single factor driving France's overall

budget deficit, which has grown to €49.6 bil-

ry, largely occupation-based, health insurance

€

The health care

funds. These funds are ostensibly private enti-

lion, or 2.5 percent of GDP, threatening

system is the

ties but are heavily regulated and supervised by

France's ability to meet the Maastricht criteria

for participation in the Eurozone.50 This may

the French government. Premiums (funded

largest single fac-

primarily through payroll taxes), benefits, and

be just the tip of the iceberg. Some government

tor driving

provider reimbursement rates are all set by the

projections suggest the deficit in the health

care system alone could top €€29 billion by

France's overall

government. In these ways the funds are simi-

2010 and €66 billion by 2020.51

lar to public utilities in the United States.

€

budget deficit.

The largest fund, the General National

In general, the funds provide coverage for

Health Insurance Scheme, covers most nona-

inpatient and outpatient care, physician and

gricultural workers and their dependents,

specialist services, diagnostic testing, prescrip-

about 83 percent of French residents. Separate

tion drugs, and home care services. In most

insurance plans cover agricultural workers, the

cases, the services covered are explicitly specified

self-employed, and certain special occupations

in regulation. However, some "implicit" benefit

like miners, transportation workers, artists,

guarantees occasionally result in conflicts over

what benefits are and are not fully covered.52

clergy, and notaries public. Another fund cov-

ers the unemployed. These larger insurance

Most services require substantial copay-

schemes are broken down into smaller pools

ments, ranging from 10 to 40 percent of the

based on geographic region. Overall, about 99

cost. As a result, French consumers pay for

percent of French citizens are covered by

roughly 13 percent of health care out of pocket,

national health insurance.

roughly the same percentage as U.S. con-

sumers.53 Moreover, because many health care

The French health care system is the world's

third most expensive, costing roughly 11 per-

services are not covered, and because many of

cent of GDP, behind only the United States (17

the best providers refuse to accept the fee sched-

percent) and Switzerland (11.5 percent). Payroll

ules imposed by the insurance funds, more

taxes provide the largest source of funding.

than 92 percent of French residents purchase

complementary private insurance.54 In fact, pri-

Employers must pay 12.8 percent of wages for

every employee, while employees contribute an

vate insurance now makes up roughly 12.7 per-

additional 0.75 percent of wages, for a total pay-

cent of all health care spending in France, a per-

roll tax of 13.55 percent. In addition, there is a

centage exceeded only by the Netherlands (15.2

5.25 general social contribution tax on income

percent) and the United States (35 percent)

among industrialized countries.55

(reduced to 3.95 percent on pension income and

unemployment benefits). Thus, most French

The combination of out-of-pocket and

8