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The Finance Ministry has backtracked from a plan to force the health funds to collect a regressive, NIS 90 monthly fee from housewives, low-income employees and the unemployed aged 18 to 67 in exchange for their health insurance coverage.
The move had been opposed by the Health Ministry and public health experts.
The Finance Ministry decision paves the way for a compromise in which only the National Insurance Institute would be allowed to collect the tax from these groups, and the health funds would be able to reduce the charges to be paid through the NII by relevant members below the NIS 90 figure.
This preserves the principle carried out since 1995 that health funds provide services to members in exchange for health taxes and do not charge members directly.
The progressive regular health tax is deducted from wages or self-employed income and sent to the NII. The NII in turn distributes it to the insurers according to the number of members, with extra bonuses according to the number of members and those with the most serious, expensive-to-treat diseases.
The Health Ministry and other opponents worried that the proposed arrangement would serve as a precedent for returning to the pre-1995 system, in which residents received health care only if they paid membership fees.
The Doctors for Human Rights-Israel, Association for Civil Rights in Israel and the Adva Center issued a joint statement last week attacking the Finance Ministry initiative, which the ministry had claimed would "increase competition" among the public health insurers.
Since 1995, salaried and self-employed residents and their children have been entitled to a basket of health services in exchange for a 4.6 percent tax of monthly income. Some groups, such as students, pay a set, reduced fee, while others have been exempt.
But the Finance Ministry wanted to revert to the situation before the National Health Insurance law went into effect. The opponents maintained that the arrangement would not increase competition, as no health fund could afford to provide such services for less than NIS 77 a month - just NIS 13 below what they would be charged.
At present, the health funds cover at their own expense (beyond health taxes distributed by the NII and state subsidies) only 6.45% of the cost of the health basket. But the regressive proposal, said the opponents, would raise this to 20% of the cost of the basket.
It was not clear after the compromise was reached how the NII would collect the money, especially from people who have no bank accounts.
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