J. User-Owned Comprehensive Health Insurance & Services by Mutuals

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Mutual assistance associations, usually termed "mutuals" are
similar in many ways to co-operative enterprises.  Historically,
in many countries they developed from the same roots, in the same
societal conditions, and for the same purposes as co-operative
enterprises, from which they were distinguished in many cases
only by the specifics of legislation and administrative usage. 

Mutual societies in Europe have the same historical origins as
trade unions and co-operatives, but have constituted a separate
juridical form since the end of the nineteenth century.  They
developed first in the agricultural sector as societies for
mutual help in order to protect farmers from occupational losses
(livestock mortality, fire, etcetera), then developed in urban
centres among workers as a form of social insurance against
accidents, ill-health and unemployment. There are various
definitions of mutuals, depending on the configuration of the
national social security scheme, with which they are closely
related.  However, the basic difference from co-operative
enterprises lies in the form of ownership. While a co-operative
belongs to members, the mutual organization has no social
capital, does not pay dividends, and in case of liquidation its
assets are not distributed among members.

Contemporary co-operative movements and mutuals maintain the
distinctions between them, but there is considerable strategic
collaboration - for example, the specialized body of the
International Co-operative Alliance concerned with insurance is
the International Co-operative and Mutual Insurance Federation
(mutual insurers having been admitted to membership with co-
operative insurers in 1993.  More broadly, co-operative, mutual
and other associations, such as trade unions, are perceived as
forming complementary, if distinct, components of what is termed
the "social economy" - as is the case of the responsible
Directorate within the European Union.81/

Although this global review is concerned explicitly with co-
operative organizations, given the mandates provided by the
General Assembly, it is considered relevant to its purpose, and
specifically to its consideration of strategies for more
effective contribution by the co-operative movement to health and
social well-being - which will involve strategic alliances with
other stakeholders - that the nature of the engagement by "mutual
organizations" be explained.  While resources did not permit a
comprehensive review of this engagement, the contribution of such
organizations is included below as an example.

In France mutual assistance groups, whose function was to come
to the help of persons working within the same profession, and
their dependants, when confronted by unemployment of illness,
were common as early as the Middle Ages. They achieved legal
recognition in 1852 as "mutual aid societies" (Societes de
Secours Mutuels or "Mutuelles"). They increased from 2,000 (with
about 100,000 members) in 1850 to about 13,000 (with about
2,100,000 members) by the end of the century. The first legal
code devoted to them (the Mutualite Code of 1898) defined them
as follows:

     "Mutual Aid Societies are providence associations which
     propose to attain one or more of the following goals:
     assure assistance for members and their families in case of
     illness, injury or disability; establish retirement funds
     for their members; take out private or collective death or
     accident insurance policies to benefit their members;
     provide for funeral expenses and grant assistance to the
     descendants, widowers or orphans of deceased participating
     members. In addition they can create for their members
     professional courses, free placement services and allocate
     funds in case of unemployment, on the condition that these
     three expenses be provided for by contributions or special

During the remainder of the nineteenth century an increasing
number of Mutual Aid Societies combined in unions at local and
departmental levels, and in 1902 a National Federation of the
French "Mutualite" (Federation Nationale de la Mutualite
Francaise) was created.

During the nineteenth century the basic insurance function of
Mutual Aid Societies had been expanded to include establishment
and management of social charities, doctors, pharmacies, maternal
and child welfare health centres, employment services, training
courses, public baths, soup kitchens and other facilities and
programmes. During the twentieth century further expansion
occurred, including creation of funds designed to pay
hospitalization expenses (caisses chirugicales), as well as
mutual aid clinics.   From 1895 onwards Mutual Aid Societies
could contract with other non-profit organizations in order to
create or manage health-care, social or cultural establishments.

When a National Insurance System (Assurances Sociales) was
introduced in 1930, with compulsory membership for salaried
employers in industry and commerce, the Mutual Aid Societies were
assigned management of 500 Health Insurance Funds (Caisses
d'assurance maladie), which covered 40 per cent of the total
number of persons insured by the National Insurance System, as
well as management of 63 pension plans (Caisses d'assurance
vieillesse) which covered 60 per cent of those insured.   By 1938
there were 22,000 "mutuelles" with 9,800,000 members.

In 1945 a comprehensive national system of compulsory social
security was created, covering at first a large but incomplete
proportion of citizens. It was gradually extended over the next
33 years to cover sections of the population with particular
needs, and by 1978 achieved a virtual universal coverage.  The
system of Mutual Aid Societies ("la Mutualite") continued to play
an important role as a formally acknowledged partner to the
public sector in the administration of this national system. 
They provide complementary health insurance, whereby members, who
must pay providers directly for health services and then obtain
reimbursement of part of the cost from the Social Security
System, are able to obtain reimbursement from their "mutuelle"
of that part of the health-care expenses  recognized by the
Social Security System but left to be paid by the insured person
("ticket moderateur"). Mutual Aid Societies may assume
responsibility also, under the "tiers payant" arrangement, for
direct payment to health providers on behalf of members not only
the "ticket moderateur" but also that part covered by the Social
Security System.  This is particularly useful for persons for
whom direct payment would be financially burdensome.  The system
allows for the co-existence of a public sector health insurance
system and private provision of health services, with an
intermediate moderating arrangement which favours the less

By 1990 there were about 6,000 "mutuelles", with 12,500,000
members and a total of 25,000,000 persons covered.  Societies of
public sector employees (civil servants) accounted for 4 million
members; those associated with the labour force of single
enterprises or groups of enterprise accounted for 4.3 million
members; and "interprofessional" societies accounted for 4.2
million members.  By mid-1995 there were 27 million persons
covered: half the French population.  The "mutuelles" had 60
percent of the complementary health insurance market.  

In addition to providing health insurance, the mutuelles offered
privileged access to health and social services of high quality
and lower than average cost.  By mid-1995 there were more than
1,300 enterprises providing health-care, social or cultural
services and owned by Mutual Aid Societies. They had a total
annual turnover of six billion francs and employed about 20,000
persons. They included pharmacies, optical and dental services,
medical centres and other health institutions, including 42
hospitals and 295 optical centres. Home-care and treatment
services for elderly persons are provided as well as "logements-
foyers", consisting of small apartments in which elderly persons
are able to live independently while having access to collective
services.  Specialized centres are operated for persons with
disabilities: they are designed to increase their personal
autonomy and support their effective social integration.  
Leisure and vacation centres are also operated.

The Mutual Aid Societies also manage contingency plans designed
to complement compulsory Social Security System programmes.  They
are managed centrally by the Federation Nationale de la Metalloid
Francaise as a specialist subsidiary: "Prevoyance Mutex".  By the
mid-1990s MUTEX offered a wide range of plans.  200 Mutual Aid
Societies managed 86,000 contingency contracts covering over four
million persons. Many were intended to serve particularly the
needs of small businesses. They include family protection (death
benefits, allowances for persons with disabilities, survivors'
annuities, spouses' allowances); protection of income for
economically active and retired persons in case of incapacity;
as well as savings plans and insurance of loans in circumstances
of illness, death or unemployment.

The Federation Nationale de la Mutualite Francaise has a
specialist health and social care research institute (Laboratoire
d'Innovation Sociale), an organization responsible for promoting
preventive practices (Association PREMUTAN), and undertakes
numerous and varied health education and preventive health
programmes and campaigns.

Mutual Aid Societies play a particularly important role in the
management of health insurance for civil servants, employees of
state enterprises and students (each of which group being members
of their own "mutuelle".  About 60 per cent of unsalaried non-
agricultural workers and about 10 per cent of unsalaried
agricultural workers are members of Mutual Aid Societies which
manage their health and maternity insurance.

Mutual Aid Societies are non-profit associations of persons
having common occupations or resident in the same areas.  In
exchange for member contributions, which can be a fixed sum paid
periodically or a percentage of income, the Societies offer
guarantees against certain risks and a number of services. 
Members exercise effective controls and each has a vote for use
in the election of a voluntary Administrative Council.  This has
real control over business strategy. The General Assembly of
members has final decision-making authority. While each society
is independent, they are able to establish unions or federations
in order to increase their effectiveness. The basic principle is
that of solidarity.82/