Healthcare Funds to Improve Geriatric Services, While Charging More

The insurance policy should be personalized, not collective, says the treasury's insurance commissioner

Israel's health services are planning a revolution in long-term care for the aged, but the improved service will cost taxpayers more.

Some four million Israelis possess insurance to cover their needs in old age. But the Finance Ministry commissioner of insurance believes coverage should be  personal, not collective. In other words, each insurance customer would negotiate a price for the terms he or she wants.

The change would significantly increase geriatric insurance costs, particularly for older clients.

The current collective set-up calls for the health service funds to buy insurance from a private insurer for all its clients.

The advantage is that the health service funds can obtain rates that are half or a quarter of what individuals would pay. The downside is that young people are subsidizing older members.

Another disadvantage is that the policy is renewed every three or four years. Geriatric care insurance prices rose by hundreds of percent in recent years, so policy renewal exposes members to deteriorating conditions and sharp price increases.

The new arrangement will still allow health service funds to buy insurance collectively, but individuals will purchase their policies based on their personal health profile. Individuals will also be able to amass insurance rights, such that those who suspend payments will have their rights preserved. Nevertheless, the reform will lead to much higher prices, especially for older members.