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Media articles in France are highlighting a so-called ‘loophole’ that allows Americans in France to receive ‘free’ healthcare without paying income tax. 

A number of long-form articles have been published in recent days looking at the healthcare status of American retirees living in France on a VLS-TS visa. 

The topic is divisive – even among Americans living in France – with some claiming they have unfair advantages and others arguing their higher than average spending more than makes up for the healthcare they receive.

It comes as MPs begin debating the social security aspect of France’s draft 2026 budget, which is forecast to reach a €23 billion deficit by the end of the year. 

However, there are currently no plans to change the healthcare status of non-French retirees living in France as part of the draft budget’s cost-cutting measures. 

What are the rules?

To clarify, French media is highlighting the case of people arriving in France on one-year VLS-TS (visa de long séjour valant titre de séjour) visas. 

These are deemed equivalent to a first residency card and, in the case of retirees, they are renewable annually. After five years in France on this status it is possible to apply for a 10 year resident’s card. 

The VLS-TS does not come with the right to work, and holders must prove they have a monthly income higher than France’s minimum wage. As of November 2025, this is €1,426.30 net per month.

For retirees, this will come from pensions, investments, and other income sources.

When applying for the initial visa, you must prove you have medical insurance covering at least €30,000 for your stay in the country.

After three months of living in France, holders can apply for a social security number and subsequently a carte Vitale, coming under the coverage of France’s state healthcare system. 

This includes the same coverage as any other carte Vitale holder, such as 70% of many doctors’ appointment fees.

Many holders then choose to cancel their original health insurance in place of a less expensive top-up mutuelle to ensure they are fully covered. 

While French media highlighted the case of Americans, this is the same process for retirees from many countries, provided they do not have an S1 health form (in the latter case the country paying their pension pays for their healthcare in France). 

However, high healthcare costs in the US are often cited as one attractive factor for Americans moving to France. 

Is the measure controversial?

This is not a ‘loophole’ and stems from rule changes in 2016 to France’s social security system through the creation of protection universelle maladie (Puma).

The rules state that anyone in France for more than three months (therefore resident in the country on a settled basis) is entitled to be covered by state healthcare.

The changes aimed to simplify the French health system and to ensure that all residents were covered. Many countries have residency-based healthcare, including the UK (although in recent years the UK introduced additional annual NHS charges for newcomers of around £1,000/year).

However, well-off Americans, and others who do not have social security rights via work, a French pension or an S1 form, are required to pay a ‘Puma tax’ (official name Cotisation subsidiaire maladie) if they have ‘capital’ incomes above a certain level. 

This includes, for example, income from rent, shares, bank accounts and other investment schemes or capital gains from the sale of property.

There is an allowance of €23,550, after which the fee is charged at 6.5% within a certain ceiling. This means it is possible for wealthy individuals to pay up to €24,492 per year to belong to the French health.

The issue of American beneficiaries “not paying income tax” is separate, and is based on the US-France double-tax treaty, ratified in 1995. 

However, this does not exempt them from French tax on all forms of income, only certain kinds such as American pensions, which are taxable only in the US.