The economic-social cabinet, headed by Minister of Finance Ronnie Bar-On, has approved the establishment of a fifth health fund in the 2008 budget bill. Although this is not the first time that the Ministry of Finance has submitted this proposal, neither the cabinet nor the Knesset approved it before.
The Ministry of Finance said that the establishment of a fifth health fund would increase competition in the healthcare industry, where four funds currently operate: Clalit Health Services, Kupat Holim Meuhedet, Leumit Health Services, and Maccabi Healthcare Services. The Ministry also claims that the two largest funds, Maccabi and Clalit, control 80% of the market, and that all four funds operate under the Health Insurance Law (5754-1994).
The Ministry says, “The existence of four health funds for so long harms both the funds’ ability to differentiate and competition. This is probably the reason why fewer than 1% of members switch funds each year.”
The State Comptroller has also commented in the past about the low rate of switching between the health funds, but cites restrictions imposed by the government as the reason. Currently, it is only possible to switch health funds on four dates during the year by signing documents at the Post Office.
Published by Globes [online], Israel business news - www.globes.co.il - on August 9, 2007
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