On October 1, two reforms to the health insurance market came into force in Israel, introducing major changes to the system and changing the relationship between clients, insurance companies and health insurance funds.
Reform of operations insurance policies in Israel
The reform carried out by the government as part of the Market Regulation Law of 2023 will change the structure of insurance policies covering surgery and surgery-replacement treatments in Israel.
From October 1, insurance companies can sell such policies in the following three types:
1) Additional coverage to the extended health insurance insurance (SHABAN) with own contribution of 5,000 shekels. Under such a policy, the client must first contact the health insurance fund, which will cover the cost of the operation under the SHABAN policy, and the insurance company will cover only the remaining cost minus 5,000 shekels of its own contribution.
2) Additional coverage to the extended health insurance insurance (SHABAN) from the first shekel. Under such a policy, the client must first contact the health insurance fund, which will cover the cost of the operation under the SHABAN policy, and the insurance company will cover only the remaining cost.
3) Full private insurance coverage from 1 shekel.
In the second stage of the reform, which will come into force in June 2024, everyone who purchased an insurance policy to cover the cost of operations in Israel starting from February 2016 will be forcibly transferred for policies of additional coverage to the extended health insurance insurance (SHABAN), and if they want to return to full private insurance coverage from 1 shekel, they will have to contact your insurance company yourself. For insurance policies purchased until the end of January 2016 this reform does not apply.
The goal of the reform is to strengthen the financing of public health care by ending the practice of private insurance companies using its resources, and to end the unnecessary duplication of insurance policies by many clients with health insurance funds and private companies.
At the same time, insurance companies claim that clients are forcibly transferred to extended insurance of sickness funds, where the coverage of the policy depends on the charter, which can be amended by the sickness fund without the consent of the client, while the insurance company signs an individual contract with the client (the terms of which may change only within the framework of state legislation).
Reform of standardization of health insurance policies
The second reform, initiated by the insurance market administration, also provides for the introduction of three levels of insurance.
1) Standard basic packages, which include only three covers – organ transplants and special treatment abroad, payment for drugs not included in the state basket, and operations or procedures replacing operations abroad.
2) Adding to the basic coverage of operations and procedures replacing operations in Israel (see the first reform above).
3) Additional coatings.
First level policies will be unified and the same for all insurance companies.
You can sell second and third level policies only to a client who already has a first level policy. You can sell policies of the third level only to a client who already has policies of the first two levels.
Additional policies offering coverage for various options for outpatient services will be divided into nine groups, each of which can be purchased separately: medical consultations, tests, home treatment, use of modern technologies and equipment, treatment for a child, treatment for an adult, online services , calling a doctor, medical support. The list of groups can be expanded with the consent of management.
When selling additional coverage, the agent/insurer must ensure that the customer does not have the same coverage in another policy. Cross-insurance of no more than 10% of insurance coverage is allowed within different policies.
Another point of the reform prohibits the provision of short-term discounts to customers. A company that provides a discount on insurance premiums must be given for a period of at least 10 years.
This reform only applies to policies purchased or renewed after September 30, 2023. Group insurance policies, which have a limited validity period and are renewed regularly, will change in accordance with the reform from the date of renewal.