National health insurance deficit to grow next year
Luxembourg's national health insurance fund CNS is forecasting ballooning deficits for its health and maternity coverage as it already registered a shortfall of more than €12 million in 2020, and will have to rely on financial reserves to finance its operations.
In 2021 and 2022, the balance of current activities is expected to remain negative and amount to a deficit of €101 million in 2021 and €68 million in 2022, the CNS said in a press release on Monday.
Current revenues will not be able to finance spendings and it is necessary to dip into reserves to ensure payments and avoid increase in social contributions, the CNS said.
The health crisis contributed to this situation but is not the only factor causing the negative results, the CNS said. It is rather "the accelerator of a more structural development that started in 2017".
Estimates show that the overall reserve is set to fall from 25.4% of current expenditure in 2020 to 23.5% in 2021 and 20.8% in 2022.
The reserve is still above the legal minimum of 10% of expenditure, but is steadily decreasing from €971 million in 2019 to €790 million in 2022.
The CNS calls for caution in the medium term, if the trend in expenditure and revenue is not reversed by concrete policies, or higher employment growth than forecast.
The CNS warns that the next few years, until 2025, could be difficult to predict due to lag-effect of the pandemic, and other factors such as the impact by "long Covid", the coverage of psychotherapy, and more direct payment methods that are being introduced.
The health insurance system is projected to cover 938,000 people in 2022, of which one-third are cross-border commuters and their relatives.