Israeli Families Waste 4,000 Shekels Annually on Duplicate Health Insurance Coverage

Many Israeli families pay for both private surgery insurance and supplementary health insurance from their health fund, resulting in significant overlap and unnecessary expenses. A new calculator reveals that a typical family of four, with two adults aged 45 and two children, spends about 9,360 shekels annually on both policies combined, with 86% of that amount going to the private insurance. Switching to a supplementary policy that activates only after the health fund coverage is exhausted can cut premiums by roughly half, saving around 4,008 shekels per year or nearly 40,000 shekels over a decade.

The 2024 health insurance reform aimed to close this gap by automatically transferring approximately 636,000 insured individuals from the private "MeHaShekel HaRishon" policy to the supplementary Shaban policy. However, three groups were excluded: those who purchased policies before 2016, those insured through group workplace policies, and those without Shaban coverage. Additionally, about 269,000 people, representing 42% of those transferred, opted out and returned to their old policies. Consequently, most of the 1.65 million holders of the "MeHaShekel HaRishon" policy still maintain dual coverage.

The calculator requires family composition, Shaban level, and private insurance type to estimate annual and monthly expenses and the cost breakdown between policies. Users can input exact premiums for personalized calculations. Coverage tables show that private policies alone cover surgeries abroad, transplants, and non-subsidized medications, while the health fund covers complementary medicine, pregnancy tests beyond the basic basket, and child development. This structure explains the rationale for Shaban policies activating first, with private insurance supplementing afterward.

Since the reform, premiums for "MeHaShekel HaRishon" policies have risen sharply, while Shaban supplementary premiums increased moderately, widening the cost gap. The calculator also warns users holding a Shaban supplementary policy without active Shaban coverage in the health fund, as such policies assume another payer first and may pay less than expected otherwise. Insurance terms, waiting periods, and deductibles are set by the policy and health fund regulations, and canceling existing coverage might prevent rejoining under the same conditions. Experts advise consulting licensed professionals before altering coverage or canceling older policies.

The full article was originally published by Bizportal.