Health insurance: this time we want something concrete
Over the past few months, we have communicated to you a huge amount of information to defend our Pension Fund. Concerning this subject, we can inform you that the mass mobilization on 18 March is bearing fruit, CERN Council now seems to be willing to act. We will have to wait and see, but we are keeping a close eye on things. Today there is concern for the other mainstay of our social security system, the CHIS.
Same scenario, same result. They play for time, they wait for the deficit, and then they take “emergency” measures. Drastic measures, we suppose, in line with the financial imbalance observed. These are the measures CERN Council, the Management, and your humble servants will discuss over the coming months in the framework of the current five-yearly review. These are crucial months for the future of our health scheme. In December the die will be cast.
Same scenario, same result. They play for time, they wait for the deficit, and then they take “emergency” measures. Drastic measures, we suppose, in line with the financial imbalance observed. These are the measures CERN Council, the Management, and your humble servants will discuss over the coming months in the framework of the current five-yearly review. These are crucial months for the future of our health scheme. In December the die will be cast.
The CHIS (CERN Health Insurance Scheme) is divided into two parts, LTC (Long-Term Care) and the HIS (illness and accident cover). LTC is a capitalized scheme set up in 2001 and its funding is sound, so no problem. However, the HIS must balance its accounts every year; this is a budgetized scheme, where revenue must cover expenditure. If this fails to happen, a deficit is evident immediately, and not in 25 years, like for our pensions. This is the situation today with a deficit of more than 5 million CHF observed in the 2009 exercise.
A mutual benefit scheme
Since it began, our health scheme has been designed as a mutual benefit insurance based on the principle of social solidarity. Its motto has always been “Each person pays according to his means, each person benefits according to his needs”. Indeed, we all pay 4.02% (for the HIS and LTC) of our salary – or the last adjusted salary for pensioners – whether we are in career path B or F, single or married with children, young and in good health or old and in bad health. Spouses receiving a salary also contribute. That is what solidarity is all about and the Staff Association is eager to maintain this solidarity in the future.
Over the past 15 years, representatives of the active and retired staff on the CHIS Board (the scheme’s joint supervisory board, in existence since 1993) have played a major role in achieving modifications to consolidate the scheme: contributions by the Organization for retired staff in 1995, LTC in 2001, new hospitalization rules in 2003, and these are only the most important ones.
The warning bells rang in 2006, but in vain…
In 2006, in the face of the dramatic rise in health costs linked to soaring medical inflation and to the ageing of the insured population, the warning bells rang: if nothing is done, the HIS would be in deficit in the very short term. And indeed, this is what has happened today, due to a lack of adequate funding at the time, and measures able to stabilize the scheme in the long term. At the time, such measures were proposed to our authorities by the scheme’s actuary and in-house experts. There is none so deaf as those that will not hear, but there is no getting away from the facts.
We will now have to roll up our sleeves and have serious discussions. In the past two surveys a large majority of you expressed the wish to maintain the current level of benefits of our CHIS, even if contributions are increased, in accordance with the current employee/employer ratio of one third/two thirds. This is what we will defend in discussions with our negotiating partners. Of course some delegations will be understanding, others not at all.
It must be said that a wave of reform is sweeping, or has swept, across several of our countries and the economic crisis that has hit Europe does nothing to help matters. Some Member States may be tempted to attack our benefits, deemed too generous. Therefore, it is up to us, we who must bear some of the most expensive health costs in the world, to defend them.
Necessary reform
The concertation process with the Management and its representatives on the CHIS Board is currently taking place on good terms. Together we will build the CHIS of tomorrow, a mutual benefit scheme, financially balanced, which continues to offer quality benefits. However, we must be careful that the mutual aspect of the scheme does not unreasonably work to the disadvantage of some compared to others. The right balance must therefore be found.
This can be achieved by reforming the scheme and adapting it to the evolution of the medical sector and the social reality of the moment. It is too early to talk about it now, however we will come back to it as soon as possible and, in the autumn, we will consult you on the final proposals that Management will submit to Council, as we have done in the past.
We must be prepared
Everything will be decided between June and October. Either CERN Council will face up to its responsibility towards the active and retired staff and their families and this bad patch,the first in the history of the CHIS, will be soon forgotten; or it will further shilly-shally with reports, study groups and the like, and we will once again express our disagreement. Put a stop to the deficit! The future well-being of the 12 800 insured members of the scheme is at stake.
We shall give you more news on this major issue next month. In the meantime, we shall pursue our work with vigilance. And we now know that we have your support, if necessary, to help us be persuasive. Yes, supporting us in the discussions, the true asset of the Staff Association, our “weapon of mass dissuasion”, is YOU! Thanks to all of you for your trust and let us remain mobilized. Because this time, as is the case for our pensions, we truly want something concrete.
For more details on the general situation of the CHIS, please read, or re-read, the no. 31 edition of the CHISBull’ that you have recently received.A mutual benefit scheme
Since it began, our health scheme has been designed as a mutual benefit insurance based on the principle of social solidarity. Its motto has always been “Each person pays according to his means, each person benefits according to his needs”. Indeed, we all pay 4.02% (for the HIS and LTC) of our salary – or the last adjusted salary for pensioners – whether we are in career path B or F, single or married with children, young and in good health or old and in bad health. Spouses receiving a salary also contribute. That is what solidarity is all about and the Staff Association is eager to maintain this solidarity in the future.
Over the past 15 years, representatives of the active and retired staff on the CHIS Board (the scheme’s joint supervisory board, in existence since 1993) have played a major role in achieving modifications to consolidate the scheme: contributions by the Organization for retired staff in 1995, LTC in 2001, new hospitalization rules in 2003, and these are only the most important ones.
The warning bells rang in 2006, but in vain…
In 2006, in the face of the dramatic rise in health costs linked to soaring medical inflation and to the ageing of the insured population, the warning bells rang: if nothing is done, the HIS would be in deficit in the very short term. And indeed, this is what has happened today, due to a lack of adequate funding at the time, and measures able to stabilize the scheme in the long term. At the time, such measures were proposed to our authorities by the scheme’s actuary and in-house experts. There is none so deaf as those that will not hear, but there is no getting away from the facts.
We will now have to roll up our sleeves and have serious discussions. In the past two surveys a large majority of you expressed the wish to maintain the current level of benefits of our CHIS, even if contributions are increased, in accordance with the current employee/employer ratio of one third/two thirds. This is what we will defend in discussions with our negotiating partners. Of course some delegations will be understanding, others not at all.
It must be said that a wave of reform is sweeping, or has swept, across several of our countries and the economic crisis that has hit Europe does nothing to help matters. Some Member States may be tempted to attack our benefits, deemed too generous. Therefore, it is up to us, we who must bear some of the most expensive health costs in the world, to defend them.
Necessary reform
The concertation process with the Management and its representatives on the CHIS Board is currently taking place on good terms. Together we will build the CHIS of tomorrow, a mutual benefit scheme, financially balanced, which continues to offer quality benefits. However, we must be careful that the mutual aspect of the scheme does not unreasonably work to the disadvantage of some compared to others. The right balance must therefore be found.
This can be achieved by reforming the scheme and adapting it to the evolution of the medical sector and the social reality of the moment. It is too early to talk about it now, however we will come back to it as soon as possible and, in the autumn, we will consult you on the final proposals that Management will submit to Council, as we have done in the past.
We must be prepared
Everything will be decided between June and October. Either CERN Council will face up to its responsibility towards the active and retired staff and their families and this bad patch,the first in the history of the CHIS, will be soon forgotten; or it will further shilly-shally with reports, study groups and the like, and we will once again express our disagreement. Put a stop to the deficit! The future well-being of the 12 800 insured members of the scheme is at stake.
We shall give you more news on this major issue next month. In the meantime, we shall pursue our work with vigilance. And we now know that we have your support, if necessary, to help us be persuasive. Yes, supporting us in the discussions, the true asset of the Staff Association, our “weapon of mass dissuasion”, is YOU! Thanks to all of you for your trust and let us remain mobilized. Because this time, as is the case for our pensions, we truly want something concrete.
You can also find it on: http://cds.cern.ch/record/1255139/files/CERN-CHIS-BULL-2010-31_eng.pdf
