Healthcare in Israel

The Israel Knesset on the first day of 1995 approved the National Health Insurance Law (or National Health Insurance Act). With this new legislation, the country has demonstrated its commitment to basic and mandatory universal healthcare. The Act was fine-tuned further following certain recommendation from the National Committee of Inquiry. These recommended changes were put forward as results of previous survey carried out in the late 80s that examined the state of affairs of the Israel healthcare system. Even before that 1995 health-care reform, it was believed close to 85% of Israel population was already enjoying coverage through 1 of the 4, non-profit driven, national sickness funds. These funds were collectively contributed by employers/government and insurance taxes (these were computed based on income levels).  They are all independent funds operating their own medical facilities.  However, the National Committee of Inquiry decided that such situation was not tenable. There were perceived flaws with the system. Take Clalit (this represents the biggest fund among the four) for example, it required all members to become involved with the Histadrut labor organization, without exception, paying scant regards to those who may not be willing or not even possible to do so. There were also complaints about certain funds which imposed discriminatory terms before one can become member, e.g. age bracket, certain pre-existing health situations, and some other factors.  Additionally, there was no consistency in term of cover benefits or services across all the funds and finally (and perhaps this was the most critical component) there were still some citizens who do not have any form of insurance coverage (even though the size was really small).

 Health Insurance in Israel and Tax

Before the National Health Insurance Act, members contribute to the individual funds in the form of insurance premiums. After the legislation, the Authority introduced a new national health insurance tax and it assigned the national social security agency as depositary agent for the public. The taxes collected would then be funneled to the individual sickness fund, based on the taxpayers’ memberships and demographic boundary.  This gave rise to a brand new universal healthcare cover. Even as the health authority allows the above-mentioned funds continue to operate (including soliciting for new members), it started to proactively introduce competitions among the four funds, some of these measures include allowing members to switch between funds (but they could only do it two times in a year or every six months).

 The new system will be put under scrutiny every year. The Health Ministry would recommend a committee to re-examine and put forward suggestions on a "basket" or uniform package of medical services and prescription formula each year. This “basket” would subsequently define the minimum service expected to be on offer to all members of the public. This directly spelled out the minimum level of quality in term of cover benefits from all the 4 funds and now citizens can be assured of basic healthcare access -- which happens to be the driving force of the original health-care reform.

 The new and mandatory legislation was credited as the main reason behind the tremendous improvement on healthcare in Israel, which in turn makes Israel one of the countries in the world with the best healthcare system. There are also other factors which elevated the healthcare standard to the next level, for example allowing foreign competitions to enter the local healthcare industry and enforcing standards into the insurance sector, and certainly a standard basket of minimum services or benefits help too. But some levels of unhappiness were detected on the ground. Some complained that this "basket" does not measure up to their insurance needs – and the HMOs and other private insurance providers (usually work in collaboration with respective employers) were quick to react; by extending “non-essential” coverage. Accusation then followed, with people arguing the implementation did not follow the spirit of the new law – which was originally to impose universal equality in healthcare among the citizens.  Some will also not please with the insurance tax. Owing to inflation and the push to make universal coverage possible, the tax income base amount (the maximum taxable yearly income) has progressively shot up. This has upset some high-income earners and they complained about ‘exorbitantly high’ insurance premiums or tax. The general citizens also expressed unhappiness on co-payments arrangement for certain services that does not seem to stop from increasing.

In order to receive a comprehensive health insurance quotation in Israel please do not hesitate to contact one of our Healthcare advisor.