Israel’s State Comptroller said the health funds and the Capital Market, Insurance and Savings Authority failed to be transparent with the public about the condition of the nursing care insurance funds, affecting about 5 million insured Israelis. The criticism appears today in a special report on the state’s preparation for an aging population, and centers on the worsening crisis in the group nursing policies run by the health funds.
Under these policies, the health funds are the policyholders for their members, while a private insurer selected in a tender operates the scheme and manages the members’ fund. Since 2024, that fund has been the sole source for paying claims, removing underwriting risk from the insurer. From 2027, insurers may end their relationship with the funds even if no replacement is found, after the continuity clause was canceled. The comptroller said the public was not clearly informed that insurers could unilaterally walk away without having to move members to a follow-on group policy.
The report says the funds’ financial condition worsened sharply in 2023 but was not detailed in annual reports, because it is no longer treated as the insurers’ own risk, and it also does not appear in the health funds’ reports. The regulator said it avoided publishing the data to prevent a mass migration of members from unstable funds to stronger ones. The crisis, the report says, stems from regulatory changes over the past decade, including a 2018 directive and tougher National Insurance Institute recognition standards, which helped drive a 150% jump in approved claims between 2012 and 2023.
The deterioration hit Clalit, which insures about half the market and is effectively the world’s largest group nursing insurer. In June to August 2023, the regulator and the Health Ministry exchanged letters instead of using dispute-resolution mechanisms, producing conflicting instructions, and Clalit petitioned the High Court of Justice in November 2023, just before its contract with the managing insurer expired. To prevent collapse, the regulator cut monthly home-care benefits by 10%, from 5,500 shekels to 5,000 shekels, and tightened eligibility from needing help with three of six ADL tasks to four core tasks. The comptroller warned the system combines public and private features in a way that leaves the public without full state protection or full commercial disclosure. The regulator said the issue requires structural reform, not just better wording, and both it and the Health Ministry said a structural change is needed. A new Clalit nursing-care tender is now underway and is expected to succeed, which could delay the immediate risk of collapse and push reform efforts further out, while the government focuses on public nursing care changes led by the Budget Department and the National Insurance Institute.
