Analyses

Over and above the compulsory National Health Insurance (NHI), two forms of VHI are available in Israel: supplementary insurance, offered by the health plans to their own beneficiaries (HP-VHI); and commercial insurance (CI) offered by CI companies to individuals or groups. Both types of coverage play a complementary role, covering benefits excluded from NHI as well as a supplementary role, providing faster access to care, greater choice of providers and additional services. In principle, HP-VHI is marketed as one package, whereas for CI each component can be purchased separately according to the consumers' needs and preferences.

Despite Israel’s broad NHI benefits package, the VHI market is still one of the largest in the OECD: 87% of Israeli adults had HP-VHI, and 53% had CI (2014). One of its main characteristics is multiple coverage: 97% of CI owners also own HP-VHI, and 47% have more than one CI plan (Brammli-Greenberg and Medina-Artom, 2015). This raises concerns that consumers may be paying twice for policies that provide the same or overlapping coverage. Therefore, in September 2015 the government approved several changes to the CI market to address the multiple coverage issue and protect consumers. The changes create more transparent and simpler insurance products to help refine consumer choice and potentially enhance market competition based on quality rather than price. The changes include:

1. Creation of a "standard policy” for surgeries and specialists consultations: insurance conditions must be the same for all insurers and insured, including coverage, premium and copayments. The premium can vary according to eight age-groups and personal risk such as gender and previous medical condition. CI can cover services provided only by physicians with selective contracts with the insurer, and providers cannot extra-bill patients. The government is currently considering extending the standard policy to HP-VHI.

2. Improving insurance for "severe diseases": the MoF (2015) redefined and updated the minimum list of diseases in order to better reflect current epidemiological and technological changes. It defined the diagnosis and symptoms needed for entitlement to compensation. Each insurer is allowed to add coverage for additional diseases, contingent upon transparent disclosure on its website.

3. Insurers must offer the different policy packages separately, each with its own price and without mutual dependency of ownership. They are allowed to give discounts to consumers who choose to purchase coverage for more than one service.