Experts Warn of Looming Crisis in Israel’s Long-Term Care Insurance Market

Israel’s long-term care insurance sector faces significant challenges as the latest government and health fund tender attracted only one insurance company, raising concerns about the market’s sustainability. The current tender, which selects insurers to provide and manage policies for eligible individuals, is set to expire at the end of the coming calendar year, with a new tender underway. However, the low participation signals that insurers view the sector as complex, unprofitable, and highly uncertain despite recent regulatory changes.

Maor Eliasi, CEO of Orient Insurance Agency, explained that although the product could generate steady income, strict regulations, capped premiums, and increasing life expectancy complicate risk assessment, deterring insurers from long-term commitment. He warned that the structural problems in long-term care insurance have not been resolved but merely postponed.

Attorney Shari Dvir highlighted that while current policyholders will maintain coverage in the short term, the limited number of market players threatens the system’s resilience. She emphasized the need for a comprehensive long-term solution to prevent future disruptions that could impact millions of insured Israelis. Dvir called for a balanced risk-sharing model among the state, health funds, and insurers, along with regulatory certainty to enable insurers to price risks and commit over extended periods.

Both experts stressed the urgency of a national reform that integrates resources from the National Insurance Institute, Ministry of Health, and Finance Ministry to establish a state-backed safety net guaranteeing basic long-term care for all citizens. They warned that without such intervention, families could face severe financial hardship when a member becomes dependent on long-term care, potentially leading to economic collapse. The experts urged policymakers to seize the current opportunity to implement reforms that ensure market stability and protect vulnerable populations over the next two to three decades.