Clalit HMO Takes on Health Insurers

Clalit Health Services health maintenance organization (HMO), which insures 55 percent of all Israeli citizens, announced a "revolution in the field of health and health insurance in Israel" yesterday, as it inaugurated a new insurance layer to its supplemental insurance plan: "Clalit Platinum".

The new layer, which will become available to Clalit members as of the beginning of February, contains seven new coverage clauses, the most exceptional being coverage for cancer drugs not included in the health basket, which may cost thousands of shekels monthly and could total NIS 2.5 million. Coverage for such treatments has been offered only by insurance companies up to now. The new plan offers coverage for up to NIS 1 million.

Before approving the plan, the Health Ministry insisted that Clalit ensure continuity in the care provided so that patients continue to receive uninterrupted cancer medication, even after the limit of NIS 1 million is reached.

But cancer patients will not be able to come knocking on Clalit's door tomorrow. The HMO applies a twenty-four month waiting period for cancer drugs and operations. As a result, a healthy person that joins the plan but becomes ill during the waiting period will not be eligible for policy benefits.

Other clauses in the plan include coverage of a substantial portion of costs for operations outside the country at any medical institution.

Expensive fertility treatments are also covered. In fact, the new insurance offers reimbursement of up to 75 percent of fertility treatments, with a limit of up to NIS 10,000. The insurance limits treatment to two children only, and involves a waiting period of one year.

The real news in Clalit's new layer. What sets it apart from private insurance companies is that joining the plan will entail no medical underwriting or age limit. Monthly premiums will range between NIS 11 for children 0-17, and up to NIS 77 for persons aged 70 and older, increasing insurance premiums by 130 percent in some cases.

Explaining the waiting period in the new insurance basket, Clalit sources say the HMO must protect itself against an onslaught of cancer patients transferring from other HMOs. In addition, it must prevent a situation in which people acquire Platinum insurance after becoming ill with cancer.

Shake up in private insurance

Roy Shaked, director of the medical claims department in Clalit, added, "In order to meet the costs of financing a new insurance plan, the HMO must first accumulate funds from its insured."

According to Health Ministry data, 64 percent of all Clalit insureds currently pay for supplementary insurance, earning the HMO NIS 800 million annually. Clalit estimates that within three years, the Platinum basket will generate an additional NIS 600 million annually, with the addition of 500,000 individuals to the plan.

Inauguration of the new insurance product precedes an attractive supplementary insurance package currently being consolidated by HMO Maccabi Healthcare Services.

Director of Clalit Zeev Vurembrand said the new insurance would "shake up private insurance company supplemental insurance plans and force all of the players in the market to offer new insurance products."

The health system and insurance sector greeted the new product with mixed reaction, and expressed concern that introducing life-saving drugs into supplementary insurance programs would make them available only to patients with financial means.

Addressing this, Vurembrand responded: "I led the battle to prevent inclusion of life-saving medicines in supplemental insurance, but unfortunately we have failed to implement an automatic update of the healthcare basket, and we left the market to private insurance companies who do not provide a sufficient solution. And as a result we have no option but to create a new strategy for the benefit of our insured."