The Histadrut (General Federation of Labor in Israel) is expected to declare a labor dispute on Tuesday, following the emergence of a crisis in insurance for long-term nursing care. Such a step would allow the Histadrut to call a general strike after two weeks has passed.Two large teachers unions are expected to participate in the declaration, leading to disruptions in the educational system starting next month unless a solution to the crisis is found by then. The crisis resulted from a decision by Capital Market Authority head Dorit Salinger to eliminate collective nursing insurance starting on January 1.
In a "Globes" interview, Histadrut chairman Avi Nissenkorn attacked Salinger and called on Minister of Finance Moshe Kahlon to promote a solution based on state nursing care insurance, as proposed by Minister of Health Yaakov Litzman. "There is a broad problem there that must be solved," Nissenkorn declared. "There are a million people who will suddenly have no insurance. Imagine that this happened in some other sphere - a million people who suddenly have no pension. A million people whose insurance company collapsed, or whose bank collapsed. There are a million people whose nursing care insurance will suddenly collapse. The consequences are momentous. It's a real disaster."
Kahlon did not conceal his dismay with Salinger's decision. He asked his deputy, MK Yitzhak Cohen, to find an agreed solution to the crisis other than according to Salinger's plan.
Given the fact only a few weeks are left until the current insurance policies expire, Ministry of Finance sources predicted that Salinger would have to extend the policies for an additional period, even if only for a month or two, until a solution is designed, in order to avoid leaving policyholders without coverage. In the past, the Supervisor of Insurance extended a number of deadlines for such collective insurance. For their part, Capital Market Authority sources are still saying that they will not give in, particularly in view of the State Comptroller's report, which severely criticized the Capital Market Authority's oversight on exactly this point.
The Ministry of Finance seeks a compromise that will prevent termination of insurance
"Salinger's solution is an excellent solution for the insurance companies, but it is a bad solution for policyholders and the public. This is an immoral and unequal solution. Her solution is to say, 'We'll continue to put the burden on the public, and it will cost you more. Where is the state? Where is the state's responsibility? Where is reducing the burden on the public, where is concern for the disadvantaged? Where is the regarding of the nursing care issue as something that we will have to solve in the long term, because it will only get worse? Where is the concern for a million people who overnight will be without insurance? You can't just say, 'I'm canceling it.' What will happen then? I don't know. What is happening now is a disavowal of responsibility," Nissenkorn complained.
"The workers' committees entered the vacuum"
"Globes": But everything about this crisis was known in advance. Each time, they extend the insurance policies by a year.
Nissenkorn: "I've been talking about this for months. Last year, we agreed that there would be a fundamental solution, and unfortunately, that did not happen. Unfortunately, Israel goes from one crisis to another, and solves things only at the last minute."
At the Histadrut, you also bear part of the responsibility for this crisis. You're the ones who distributed these products (collective nursing care insurance) to the workers through the committees.
"I've been Histadrut chairman for three and a half years, and these products have existed for a great many years. There was a vacuum. The state did nothing about nursing care insurance. Along came the insurance companies and marketed a nursing care product approved by the Ministry of Finance Department of Capital Markets, Insurance, and Savings. The workers' committees stepped into the vacuum and made sure that there would at least be something. The Department of Capital Markets, Insurance, and Savings is an important partner in this failure - it approved the policies. The insurance companies are partners in this failure - they marketed this insurance."
But the committees were the ones who sold the workers an illusion that you could buy nursing care insurance cheaply, and it turns out that it is not worth even the cheap price that was paid for it.
"They did not sell the workers an illusion. There was no other insurance product. The Department of Capital Markets, Insurance, and Savings set no rules, made no recommendations, and initiated no other product. This was the only insurance product there was, so buying it is better than nothing. The government was absent - it did nothing about the issue. When the government is irresponsible and ignores the issue, this is what is left. It's true that the Department of Capital Markets, Insurance, and Savings should have worked towards a solution, but it cannot be a partial solution. The solution has to be for all eight million people in the country, not just for these one million people (the policyholders, A.B.). In Israel now, 50% of the burden of nursing care is paid for by private spending. In the OECD countries, it's 16%. In other words, we're spending three times as much as the public in the developed countries."
What is the solution?
"The solution is eventually to institute state nursing care insurance. That's the prevailing practice in the world. That's what should be done, and certainly not to create empty spaces. You can't tell a person, 'Your insurance is bad, and I'm canceling it - starting now, you are uninsured. What is the alternative? Start paying hundreds of shekels a month (for private nursing care insurance, A.B.)? That's a fantasy."
What Litzman's proposal for state nursing care insurance means is to make the workers pay for nursing care insurance for people who do not work.
"I'm in favor of it, even if increases the payroll deductions. You have to make sure that there are decent allowances - it's also in the interest of both the workers and the pensioners."
The state's great nursing care challenge
The challenge of paying for a relative in need of long-term nursing care is growing from year to year as a result of improvements in medicine. Not only are people living longer, they are living longer as long-term nursing patients, and that takes a lot of resources - at the national level, and especially at the family level.
Over the years, people who wanted to hedge their economic risk bought nursing care insurance: individual insurance, group insurance from the health funds, or other group insurance (from their place of employment, for example). In individual insurance, the insurance company assumes the future obligation to pay, and it cannot be terminated as long as the policyholder pays the premium set in the policy. In the group policies of the health funds, improvements have been made in recent years, and these policies cover large population groups. The "ordinary" group policies are different. These involve closed groups that over the years stopped accepting young people, because the risk incurred ballooned, and so did the price. The result was enormous price rises, with an inability to pay for insurance at a "true" rate. This is what led the Supervisor of Insurance to cancel those policies.
This cancelation leaves many people uninsured at the very time when they reached an age at which the risk of needing long-term nursing care becomes tangible. The current solution of the Capital Markets Authority head is to allow senior citizens to buy insurance easily from the health funds at a reduced price.
In his report on the matter, the State Comptroller stated, "The material and ongoing failure that has been revealed in everything pertaining to regulation of the commercial group insurance market, which has affected the rights of a very large proportion of the public, is a long-term failure that has been going on for more than 19 years." He wrote that the responsibility for this rests with the "policyholders, advisers, insurance companies, and people insured in the framework of group nursing care insurance." According to the State Comptroller, the solutions are problematic: "Adding elderly policyholders to the health funds' nursing care policies without medical underwriting will lead to the burden of subsidizing of the premium for the excess insurance risk of these policyholders being imposed on the other holders of nursing care insurance policies at the health funds, without any justification. Protection of human rights, above all the preservation of human dignity, requires all the government authorities in Israel to take care of these senior citizens, and it should be done from a forward-looking perspective, and especially in the long term."
Published by Globes [online], Israel Business News - www.globes-online.com - on November 1, 2017
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