Ministry of Health director general Moshe Bar Siman Tov instructed the health funds today not to act in accordance with the directive from the Capital Markets, Insurance and Savings Authority, originating from the Ministry of Finance, worsening the terms of the funds’ nursing care insurance policies.
The Capital Markets, Insurance and Savings Authority called for a reduction in the benefits provided by the policies. It sought a NIS 600 cut in the monthly allowance, from NIS 6,100 to NIS 5,500, with the aim of stabilizing the funds set up by the health funds for payouts to insurees. The Authority also sought to extend the period during which insurees need to be recognized as in need of nursing care before they receive benefits under the policies from two months to six months.
Although it has not so far done so, the Capital Markets, Insurance and Savings Authority could intervene on two further aspects of nursing care insurance. It could oblige the health funds to raise the premiums they charge, and it could make conditions for approving a claim stricter.
The Capital Markets, Insurance and Savings Authority’s decision came in the wake of a substantial rise in the rate of nursing care claims at the health funds, mainly because of easier conditions for receiving benefits following relaxations by the National Insurance Institute, which in effect also oblige the health funds to relax their conditions. At the same time, life expectancy has increased, as has the public’s awareness of the existence of nursing care insurance, and companies have sprung up that assist insurees in making claims.
The fear is that the insurance funds will be emptied out and will collapse, so that young people now paying for nursing care in the future will not receive any allowance at all. The health funds do not want to raise their premiums for fear of losing insurees, and of people on low incomes being left without coverage.
In theory, since the insurance is provided by the health funds, the state could guarantee it, but at the moment it is not clear that it will do so. Several possible solutions have been raised. The first is government aid, that is, from taxpayers’ money. The argument raised against this is that it will mean that people who cannot afford nursing care insurance will be subsidizing those who can.
Another possibility is to include nursing care in the health tax that pays for regular medical care. This would require raising the tax, in addition to payments of tens of billions of shekels annually that would fall on the state budget. As previously reported by "Globes", the Capital Markets, Insurance and Savings Authority itself explored the possibility of nursing care cover being provided through deposits in the pension funds, but the idea was not pursued.
Now, the Authority is looking to cut benefits under new claims, in order not to harm insurees who already receive allowances and rely on them. If the money runs out and the state does not provide assistance, the health funds will have no choice but to cut benefits themselves.
The fund in the greatest trouble is Clalit Health Services. It has 2.5 million nursing care insurees, but only a few hundred million shekels to pay allowances, and, according to estimates, will run out of money within a few months to a year.
The second largest health fund, Maccabi Health Services, has 1.6 million insurees, and say that it has a NIS 5 billion surplus for paying nursing care claims. Meuhedet has some 450,000 nursing care insurees, and Leumit Health Care Services has 271,000.The assessment is that, without policy changes at all the health funds, the money will run out within a few years.
Published by Globes, Israel business news - en.globes.co.il - on August 8, 2023.
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