Universal healthcare coverage exists for all Israeli residents. Additionally, around 80% of the population holds supplementary health insurance, commonly known as "Shaban" (with varying names across different health funds).
Private health insurance policies are also available marketed by insurance companies. There is an overlap between these private policies and those offered by health funds (Israeli HMOs), particularly in the context of surgery coverage. However, when policyholders seek to exercise their rights, they can only do so through one policy despite paying premiums for both.
The reform aims to reduce the duplication in surgical coverage policies. It is estimated that the unnecessary additional cost to households is around NIS 1,300 annually, accounting for approximately one-third of the policy's cost. The reform solely applies to surgical procedures and does not cover medications or outpatient services.
Who is affected by the reform?
Approximately 2 million individuals insured under the "from the first shekel" private health insurance plan will automatically transition to the supplementary insurance plan, where currently, half a million people are insured. Those who wish to remain with the "from the first shekel" policy must notify their insurance company. Initially, policyholders could reverse their decision and return to this policy within a year, but recently, some insurance companies have extended this right for "from the first shekel" policyholders, who were automatically moved to the supplementary Shaban plan for five years.
The reform only applies to those holding surgical coverage policies issued after February 2016. Policyholders with older policies will not be affected. Additionally, the change will not impact group insurance plans offered by some employers.
The Difference Between the Policies What is the distinction between these two policies?
They address situations where policyholders require surgical procedures. Within the public healthcare system, patients cannot choose their surgeons, leading many to seek private care through either the Shaban or private insurance policies. The "from the first shekel" policy allows policyholders to select surgeons from the insurance company's list of physicians and undergo the procedure with them. In such cases, claim management is handled directly with the insurance company.
The supplementary Shaban policy prioritizes surgeries performed by doctors affiliated with the policyholder's health fund. In other words, under the new arrangement, policyholders will need to verify if their chosen surgeons work with their health fund. If so, the surgery will be performed through the health fund. If not, they will need to provide the health fund's rejection letter to the insurance company, and the surgery will be conducted privately. It should be noted that if the surgeons work with the Shaban plan, even if the waiting time is lengthy, policyholders cannot claim from the insurance company.
The supplementary Shaban policy is significantly more affordable than the "from the first shekel" policy. However, as a result of the reform, the "from the first shekel" policy is expected to become more expensive for both younger individuals and those over 66 years of age, with an anticipated 45% increase. In contrast, the supplementary Shaban policy for the same age group is projected to rise by 5.6%.
So, what is preferable? The key question is how the systems will operate. If, for instance, health funds bolster their infrastructure, the reform may succeed. Past experience suggests that the public is generally not proactive in such situations. The decision should be made based on individual circumstances and specific personal details.
It is advisable to conduct market research and obtain coverage quotes and pricing from multiple insurance companies.
