Israeli Health Funds Reduce Deficit by 44% in One Year
Translated & summarized from Davar by baba
Israel's Ministry of Health reported that the aggregate deficit of the nation's health maintenance organizations (HMOs) decreased by 44% to NIS 194 million in 2025. Total revenues increased by 6.5%, while the cost of the national health basket rose to NIS 80.5 billion. Despite financial improvements, an expert warned of underlying structural issues affecting service quality. The Ministry of Health acknowledged the positive trend but emphasized the need for ongoing budget assessment to address future challenges.
The story in 6 lines · by baba
- Israel's HMOs collectively reduced their deficit by 44% to NIS 194 million in 2025.
- Total revenues for health funds increased by 6.5% in the reporting year.
- The national health basket cost rose by 6% to NIS 80.5 billion in 2025.
- Clalit HMO remained in deficit, though its deficit decreased to NIS 364 million.
- Patient co-payments as a percentage of health basket costs declined over the past decade.
- An expert criticized the report for masking structural problems despite financial gains.
Israel's Ministry of Health released its annual report on Tuesday, detailing the financial performance of the country's health maintenance organizations (HMOs) for 2025. The report indicates a significant 44% reduction in the aggregate deficit across all HMOs, falling from NIS 346 million in 2024 to approximately NIS 194 million in 2025. Total revenues for the HMOs saw an increase of about 6.5%, while the deficit as a percentage of total revenue decreased from 0.4% to 0.2%.
Maccabi HMO finished 2025 with a surplus of NIS 111 million, Meuhedet with a surplus of approximately NIS 53 million, and Leumit with a surplus of about NIS 6 million. Clalit, however, ended the year with a deficit of approximately NIS 364 million, an improvement from its NIS 542 million deficit in the previous year. This figure for Clalit includes both the HMO and its affiliated hospitals, whose deficit was reduced from NIS 3.2 billion in 2024 to NIS 2.8 billion in 2025.
The total cost of the national health basket for 2025 was approximately NIS 80.5 billion, a 6% increase from NIS 75.8 billion in 2024. Inpatient care costs rose by a real rate of about 3.5%, constituting 43% of the HMOs' total expenses, up from 42.1% in 2024. Other operational expenses included development (1.8%), administration (4.5%), private clinics and labs (7.9%), pharmaceuticals and medical equipment (17.9%), and salaries (25.4%).
The report also noted a decade-long decline in the proportion of health basket costs covered by patient co-payments, dropping from 6.13% in 2016 to about 5.5% in 2025. Factors contributing to this include the addition of expensive medications, particularly for cancer patients, a mental health reform with lower co-payments for hospitalization, the transfer of government subsidies to the health basket's cost base, HMO responsibility for work accident victims who are often exempt from co-payments, and discounts for vulnerable populations like the elderly and Holocaust survivors.
Dr. Ady Niv-Yagoda, an expert on health policy, commented that while the financial data shows improvement, it masks structural deficits and prevents the system from addressing root problems affecting quality and accessibility. He stated that the budget relies on unstable government support, hindering long-term planning and failing to translate into tangible improvements for the public. Ministry of Health Director General Moshe Bar Siman Tov described the report as "encouraging" and indicative of financial stabilization and reduced deficits, reaffirming the ministry's commitment to the public health system's resilience and accessibility. He also stressed the need to continually assess budget and support levels to meet demographic challenges and rising morbidity.
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