Israeli HMOs Say Method of Insuring Palestinians Loses Them Money

The decision to extend health care coverage to thousands of Palestinians living in Israel under family unification arrangements set premiums that are too low, HMOs say.

Ido Efrati
Ido Efrati
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A clinic in Tel Aviv (illustrative). Credit: Moti Milrod
Ido Efrati
Ido Efrati

Extending health coverage to Palestinians allowed to live in Israel under family unification arrangements will cause undue losses to the country’s health maintenance organizations, the HMOs told the High Court of Justice on Tuesday, during the first hearing on a petition they’d filed on the matter.

The decision in March to extend health care coverage to thousands of such Palestinians set premiums that are too low, and makes the HMOs themselves responsible for collecting them. This is not the case with Israelis, who pay their health taxes to the National Insurance Institute.

In March, Health Minister Yael German and Finance Minister Yair Lapid announced that Israel would for the first time allow the foreign spouses and children of Israeli citizens and residents who do not have formal status to get health coverage from the country’s four major HMOs.

The regulations, whose primary beneficiaries are Palestinians married to Israeli Arabs, offer almost all the services included in the basket of health services for 285 shekels ($79) a month per person, or 570 shekels per family. While there are waiting periods before coverage is effective, during which the premiums must be paid, those insured will be allowed to request retroactive refunds for any health services they had to pay for during the waiting period.

“This move is simply worthy, humane and correct,” German said when she signed the regulations.

But according to the HMOs, the premiums set will result in substantially lower income than what the HMOs get for Israeli citizens. “In the end, the HMOs get some 4,000 shekels a year for each [Israeli] insured, compared to only 3,200 in this case. This short-changing will cause losses to the HMOs,” explained attorney Paz Moser of the Lieblich-Moser law firm, which is representing the Leumit HMO.

Moreover, the HMOs claim, the state has made the HMOs themselves responsible for collecting the premiums directly from the newly insured Palestinians. “This means setting up a collection apparatus and new enforcement mechanisms in East Jerusalem,” where most of these potential clients reside, Moser said. “This isn’t realistic, and for some of the HMOs, who have relatively few Palestinians insured, setting up such a system will cost more than what they will collect.”

The HMOs added that the new regulations stipulate that even if these insured Palestinians fail to pay their premiums, the HMOs are required to provide them health care for 105 days before they can turn them away.

“We say that if the state wants to treat them like insured Israelis, then treat them the same way also in terms of payment and collection – that [the state] use its own collection mechanism to collect money from them and price the services similar to the way it’s done for Israeli citizens, and not at a loss,” Moser said.