Israeli Health Funds Report Narrowed Deficit, But Remain Heavily Reliant on Government Aid

Israel's four national health maintenance organizations (HMOs) collectively reduced their deficit by 44% in 2025, reaching approximately 194 million shekels, a significant improvement from the 346 million shekel deficit in the previous year. However, a Ministry of Health report reveals a growing dependence on government subsidies, rising hospitalization costs, and a persistent gap between available funds and the system's needs. Without government support, the HMOs would have faced a staggering 4.9 billion shekel deficit in 2025, up from 4.4 billion in 2024.

The largest HMO, Clalit, was the only organization to report a deficit, amounting to about 364 million shekels, though this was an improvement from its 542 million shekel deficit in 2024. Despite this, Clalit noted a reduction in the deficit of its hospitals by 400 million shekels, bringing it to 2.8 billion shekels. Without government aid, Clalit's deficit would have surged to over 3.1 billion shekels.

In contrast, Maccabi, Meuhedet, and Leumit all reported budget surpluses, largely due to government funding. Maccabi had a surplus of 111 million shekels, Meuhedet reported 53 million shekels (a substantial increase from 7 million the previous year), and Leumit had a surplus of 6 million shekels. The report cautions that without government assistance, these organizations would also have faced significant deficits, totaling hundreds of millions of shekels.

The overall cost of the health basket continued to rise, exceeding 80 billion shekels in 2025, a 6.2% increase attributed to expanded medical technologies, demographic growth, and index updates. Hospitalization expenses also climbed by a real rate of 3.5%, now constituting 43% of the HMOs' total expenditures. Community healthcare costs grew by approximately 3%, with notable increases in development, clinics, and private practices.

Ministry of Health Director General Moshe Bar Siman Tov described the data as indicative of financial stabilization, attributing it to increased government investment and HMO efficiency. He stressed the need to adapt the budget to demographic challenges. Chaim Hofart, Head of the Economics Division, emphasized that stability allows for future planning and aims to increase the demographic coefficient to prevent future deficits. Clalit stated its deficit reduction reflects responsible management during a war year, highlighting its unique structural challenge as operator of 14 public hospitals without adequate reimbursement and the costs associated with damage to the Soroka Medical Center.