Israel's Health Funds Face 25-Fold Higher Deficit Than Official Figures
Translated & summarized from Calcalist by baba
Israel's health maintenance organizations (HMOs) reported an official deficit of 194 million shekels for 2025, but their actual deficit, excluding government subsidies, was 4.9 billion shekels. This represents a significant structural gap exacerbated by insufficient self-paid contributions and increasing healthcare costs, particularly for hospitalizations. The Ministry of Health warns of a potential "deficit spiral" if budgets are not increased and demographic factors are not adequately addressed.
The story in 5 lines · by baba
- Israel's HMOs reported an official 2025 deficit of 194 million shekels, but their true deficit was 4.9 billion shekels.
- Government subsidies, not pre-budgeted, covered the majority of the 4.9 billion shekel deficit.
- The structural deficit has widened, with the Ministry of Health warning of a potential "deficit spiral."
- Member self-paid contributions have fallen short of legal requirements for nine consecutive years.
- Competition among HMOs led to over 228,000 members switching providers in 2025.
Israel's four health maintenance organizations (HMOs) officially reported a combined deficit of 194 million shekels for 2025, an improvement from the 346 million shekel deficit in 2024. However, this reported improvement was largely due to a nearly 500 million shekel increase in government subsidies, which are not pre-budgeted or legally anchored. Without these subsidies and one-time gains, the HMOs' actual deficit for 2025 would have been 4.9 billion shekels, a 472 million shekel increase from the previous year.
The Ministry of Health acknowledges that these subsidies, totaling 4.58 billion shekels in 2025, are necessary to fund initiatives like the national mental health program and wage agreements. The ministry itself noted in its report that these subsidies "impair budgetary certainty and long-term planning ability." Approximately one-third of these subsidies are designated as "stabilization programs" to address emergencies or unexpected demands, such as the 590 million shekels allocated for mental health services due to the war.
The underlying structural deficit persists, with the Ministry of Health warning that without increased budgets and updated demographic coefficients, particularly due to an aging population, the HMOs could enter a "deficit spiral." This structural gap is evident when examining individual HMOs. For instance, Clalit reported a 364 million shekel deficit, but without 2.8 billion shekels in subsidies, its deficit would be 3.17 billion shekels. Similarly, Maccabi, despite an official surplus, faces a 628 million shekel deficit without subsidies.
Further contributing to the financial strain is the consistent shortfall in self-paid contributions from members. For nine consecutive years, these collections have fallen short of the legal requirement, with a gap of approximately 785 million shekels in 2025. This shortfall is attributed to factors such as capped co-payments for expensive cancer drugs, minimal co-payments for mental health services, and exemptions for the elderly and Holocaust survivors.
Competition among HMOs also impacts finances, with 228,513 members switching providers in 2025, an increase from the previous year. Clalit lost a net of 10,533 members, while Maccabi gained 11,182. The article concludes that the official deficit figure is not a true reflection of financial health but rather a result of annual decisions by the Treasury regarding subsidy amounts.
