Capital Market Authority Publishes Second Draft of Instructions to Reduce Long-Term Care Coverage for Health Insurance Funds
The Capital Market Authority has released a second draft of instructions aimed at reducing long-term care coverage for members of health insurance funds. The draft, published after the Authority held a round of discussions on the comments received, proposes further reduction in compensation received by insured individuals whose claim was approved. The new proposal sets the total monthly compensation at NIS 5,000, instead of the previously planned NIS 5,500.
The decision to revise the initial draft comes after public outrage over the proposed changes. The goal of these measures is to ensure the stability of long-term care insurance plans in health funds, especially as some dedicated funds have been depleted, particularly in the Klalit Health Fund where surpluses are expected to last only a few months.
The revised draft includes several key components, most notably the cancellation of the proposed extension of the waiting period from two to six months. This change was made in response to feedback from various parties highlighting the significant harm it would cause to insured individuals in need of long-term care. Additionally, the draft proposes flexible risk-sharing mechanisms between insurance companies and health maintenance organizations (HMOs), to be determined through discussions between the parties involved.
Currently, approximately 4.6 million citizens are insured under the group long-term care insurance provided by health funds. This insurance offers monthly compensation to those who require long-term care assistance and are unable to perform daily activities independently. The health funds pay approximately NIS 3 billion each year to insured individuals in long-term care situations.
In recent years, there has been a noticeable increase in nursing claims, with the number of approved claims rising by tens of percent. This trend is not unique to Israel and can be attributed to various factors such as longer life expectancies for nursing patients and technological advancements. Other factors, including an increase in long-term care benefit approvals by the National Insurance Institute, the activity of companies exercising their rights, and greater public awareness of coverage, also influence long-term care claim rates in Israel.
Amit Gal, the Commissioner for the Capital Market, Insurance and Savings, emphasized the importance of fair and respectful treatment for citizens in old age. He stated that the Capital Market Authority continues to work towards establishing a fair and balanced outline that will stabilize insured funds for the overall benefit of the public. Gal also expressed the authority’s commitment to coordinating with government partners and engaging in dialogue with relevant stakeholders to ensure adequate insurance coverage for those in long-term care situations.
The second draft of instructions has been published to allow the public another opportunity to provide feedback on the proposed outline. The Authority recognizes the complexity of long-term care insurance as a socio-economic issue and strives to find a solution that meets the needs of the insured public while ensuring the continued existence of these insurance programs.