Social Security must become responsible for its management – EconomyMorning


The French social security budget in the broad sense of the term, that is to say including supplementary pensions, exceeds that of the State. Sadly, the design and management of this massive system falls short of its budget. Among the criticisms that the organization of our Safe, the most critical concerns the control of politicians over its management.

Too much politics, not enough management

The Safe in the strict sense, that is to say without supplementary pensions, sees its budget being voted each year by Parliament. This is a trompe-l’œil legislative procedure, because Social Security financing bills (PLFSS) are treated like finance bills (PLF): by application of article 49 of the Constitution, the Government can force the Parliament to ratify its text, except to adopt a motion of censure, that is to say to overthrow the Government.

What does this intrinsically governmental text contain, disguised as the Law of the Republic as if it were a question of laying down general rules? A collection of technical measures which mostly fall under the management of health and old-age insurance, as well as the family branch. In other words, the Government asks Parliament to transform simple management provisions into articles of law, which should logically fall under the General Directorate of Social Security.

For example, slightly modifying the value of a particular parameter, for example the age of the full rate for pension settlements, is a simple management measure, intended in this case to compensate for the increase in expectation of life. When the Legislator has the power to take the place of managers to make a decision of this nature, we know what that can mean : in 1981, the total destruction of the balance of social accounts, following the demagogic decision to lower from 65 to 60 the ordinary retirement age at full rate. Forty years later, our social security has not yet recovered from this measure, which legislators less oblivious, but who walk on hot coals, unravel in small touches, to the detriment of their popularity.

The role of technicians should be essential

The supplementary pension schemes, of which the ARRCO-AGIRC is the most important, take such decisions, called “parametric”, without referring to the legislator, and they do less stupid things, because their elected administrators generally follow the opinions that provide them with their actuaries – these technicians in charge of forecasting the consequences of management actions, and more particularly of value modifications made to control parameters.

Complementary health insurance, which remains fairly independent from the public authorities, having learned over time to be wary of their interference, rarely shows a deficit, despite the enormity of their management costs in relation to the reimbursements they make. By comparison, the parliamentary and ultimately governmental supervision which weighs on the health insurance of the Safe has the consequence that it is managed in a political manner, so very often in spite of common sense. Squadrons of paper scrapers have swarmed hospitals, slashing their administrative costs to take bureaucracy to new heights. In this regard, the testimony of Professor Michaël Peyromaure, Hospital, what you have never been told (Albin Michel, 2020), highlights what the recourse to social security financing laws has as consequences: the stranglehold of the health insurance on hospital management, and the bureaucratization both expensive and paralyzing which results.

But beware ! Do not focus exclusively on the consequences, on mismanagement, especially hospital. Let us go back to the causes, which lie primarily in the management of Health Insurance, state and bureaucratic management, the main source of which is recourse to Social Security financing laws.

We must replace the harmful LFSS by a simple imperative of balance under the responsibility of managers, and carry out a major structural reform

France will not emerge from the backwater where it is floundering if the legislator does not once and for all impose a simple rule of balance of social accounts, which will exempt it from voting an annual budget for the Safe. This procedure has become a permanent incentive to Always more that François de Closets was already denouncing, rightly, in 1982. As Cato the Elder repeated, Delenda is Carthago, this push-to-crime must be removed!

Over the next few years, budget management will be very difficult, whether for the State or for the Social Security. The Government will have enough to do with the State’s finances, which will need a drastic consolidation after the massive deficits caused by the pandemic, and especially with the recovery of economic activity. By the way, let us note how the vote of a finance law for 2020 turned out to be ridiculous: this scrap of paper flew away under the effect of the strong wind – the pandemic.

Wisdom, in matters of Social Security in the broad sense, including supplementary pensions, would be to limit legislative activity to the essential systemic reform of this dilapidated and irrational system. Replace our dozens of categorical pension plans with a single system, put in conformity with the theorem of Sauvy (“In distribution, we do not prepare our pensions by our contributions, but by our children”), that requires the activity of the legislator! And build a single point system, as the Delevoye project envisioned, but with points awarded based on investment in youth, not based on contributions for retirees.

On the other hand, that the managers of the new system are not bypassed by ministers and parliamentarians wishing to get involved in management! As the saying goes, “to each his own job, and the cows will be well looked after”.

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