‘Many low-earners have extra health insurance’

Health Ministry says that high overhead for Meuhedet, Leumit’s supplementary insurance plans comprises 28% of their income.

Meuhedet 311 (photo credit: Marc Israel Sellem/The Jerusalem Post)
Meuhedet 311
(photo credit: Marc Israel Sellem/The Jerusalem Post)
The overhead costs – on marketing, operation and administration – for supplying supplementary health insurance comprised 28 percent of all income from members who hold such extra policies from Kupat Holim Leumit and 25% from Kupat Holim Meuhedet. This compares to the more-efficient Maccabi Health Services, 13%, and Clalit Health Services ,16%.
The statistics were disclosed in a new annual report on supplementary health insurance compiled by the Health Ministry and an independent accountancy firm for publication on Monday.
However, the supplementary health insurance plan of Maccabi – the second-largest public health fund – was found to be in deficit for the second year in a row, and its managers were instructed by the ministry’s deputy director- general, Dr. Yoel Lipschitz, for supervision of the health funds to reach a balanced budget in the future.
All four health funds offer their members different types of supplementary health insurance beyond the basic coverage required as part of the National Health Insurance Law. According to the report, in 2010, 73% of residents hold some supplementary health insurance from their health funds.
The main benefits of paying for supplementary health insurance are operations not included under the health basket and choosing one’s surgeon.
Medications not in the official basket of health services are not provided under supplementary health insurance policies. Fully NIS 865 million, or 38% of the health fund’s supplementary health insurance policy income, went for operations and choice of surgeons, in private hospitals or public hospitals with legal Sharap [private medical service] services.
A surprising finding in the report is that fully 60% of those who receive allotments for disability or old-age with income supplements have supplementary health insurance.
These holders apparently regard the basic health insurance coverage as inadequate and want additional coverage for their healthcare.
Until now it was widely thought that those on the lower rungs of the socioeconomic scale do not usually take out supplementary health insurance. Lipschitz told The Jerusalem Post on Sunday that among the 27% who do not hold supplementary insurance are an unknown number of wealthy residents who do not need it and enjoy expensive private health coverage instead.
The report was prepared by Revital Topper-Haver Tov of Lipschitz’s office and Dafna Ravid-Barzily of the Barzilay & Co. accounting firm.
According to the authors, residents paid NIS 2.878b. for their supplementary health insurance in 2010 compared to NIS 2.585b. in 2009. The average annual payment was NIS 507 in Clalit, NIS 531 in Maccabi, NIS 532 in Meuhedet and NIS 558 in Leumit.
Of the nearly 8 million Israeli residents, 5.578m. had supplementary health insurance from their public health funds in 2010 – a 2.1% increase over the previous year. Clalit’s supplementary insurance holders grew by a significant 34% in 2010, followed by 9% in Meuhedet, and by 3% each in Maccabi and Leumit.
According to ministry regulations, health funds‚ supplementary health insurance programs must be balanced; they may not be in deficit, at least over an average of three or four years in a row, and if they enjoy a surplus,
they must plow the extra funds into their regular healthcare services.
As Maccabi, which had deficits of NIS 21m. in its supplementary health insurance in 2010 and NIS 39m. in 2009, Lipschitz instructed the health fund not to continue to do so next year.
Asked to comment, Maccabi management said “the report shows that our Maccabi Zahav plan is the most worthwhile and efficient of all.
Maccabi leads with the highest percentage of members who take advantage of this plan; 92% of payments for this return to members for additional treatments and service.”
In addition, Maccabi said the charges for this policy are the lowest of the four in almost every age group. The health fund added that many holders of its supplementary health insurance plans use it for extra care for fertility treatments and ultrasound scans for pregnant women that are not covered by ordinary health insurance.
Lipschitz instructed Maccabi to increase the efficiency of its supplementary health insurance plans, examine which services are not widely used and not to raise its premium without permission.
Maccabi told the ministry it accepted a three-year plan to cover its deficit.
Only a minority of holders of Meuhedet’s top-level (more expensive) Si supplementary health insurance plan actually received benefits, as the “benefits” are not practical and not widely used, Lipschitz said. So if the Si plan is not made more realistic and attractive, the ministry could force the health fund to cancel it. Holders of this policy should check carefully to determine whether they are getting their money’s worth, Lipschitz said.
Meanwhile, Leumit said that on January 1, it expanded its care for preserving the dental health of children up to 18 if their parents hold Leumit Zahav supplementary health insurance. The treatment will be provided at 300 private dental clinics around the country, as Leumit does not have its own dental clinic subsidiary.
A copayment of NIS 20 will be charged per child; this Leumit program offers more options than the plan instituted by the ministry for children up to the age of 10.
Leumit said its plan has “computerized national objective supervision of the professionalism of dentists, care and prices” – the ministry’s plan is not supervised by independent authorities outside the ministry. However, the ministry gave Leumit approval to launch its new dental program.