Treasury to halt private drug coverage

Sources inform ''Globes'' that, on Passover eve, Ministry of Finance Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig ordered Clalit Health Services and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) unit Dikla Insurance Ltd. as well as Maccabi Healthcare Services and Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) to cease marketing health insurance policies for drugs not included in the basket of healthcare services by the insurance companies to members of their healthcare services partners.

Sarig told Clalit, Maccabi, Harel, and Migdal that he would review the issue after the Passover holiday.

Sarig also ordered Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5) not to begin offering similar policies to members of Meuhedet Health Services until he authorized it.

So far as is known, the rationale behind Sarig's decision is that the health funds' members tend to consider them as authorities on healthcare matters, and their recommendations to buy certain insurance policies may be considered as the marketing of insurance products.

Ministry of Health deputy director general for supervision of the health funds Adv. Yoel Lifshitz is planning to make it difficult for the Ministry of Finance to pursue its objections against the insurance policies. In a measure that could have real significance for the general public, Lifshitz is considering instructing the health funds to allow insurance companies to market drug coverage policies to all members of the health funds, and not only their premium members (Gold members in the case of Maccabi, and Platinum members in the case of Clalit).

Healthcare industry sources believe that the Ministry of Finance will find it difficult to oppose such a proposal, since the health fund members would be able to obtain expensive drugs for only token amounts without being required to buy supplementary health coverage from the health funds. If Lifshitz's proposal is adopted, it would be a major blow to the health funds, especially Clalit.

Published by Globes [online], Israel business news - www.globes-online.com - on April 1, 2010

Treasury to halt private drug coverage

Insurance companies must cease marketing health insurance policies for drugs not included in the health basket to members of their healthcare services partners.