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 current government and health fund tender to select insurance providers sees participation from only one company. This low response signals deep-rooted issues in the market, which experts say have not been resolved but merely postponed. The current tender is set to expire at the end of the upcoming calendar year, with a new tender underway but attracting limited interest.

Maor Eliasi, CEO of Orient Insurance Agency, explains that despite recent regulatory changes, the sector remains complex, unprofitable, and highly uncertain. Rising life expectancy complicates risk assessment, making insurers wary of long-term commitments. Lawyer Shiri Dvir highlights that while immediate coverage for insured individuals remains intact, the long-term stability of the system is at risk due to the shrinking number of market players. This concentration increases vulnerability to economic, demographic, and regulatory shocks, potentially affecting millions of insured Israelis.

Experts call for a comprehensive national reform that moves beyond temporary solutions. They advocate for a government-led initiative pooling resources from the National Insurance Institute, Ministry of Health, and Ministry of Finance to create a state-backed safety net guaranteeing basic long-term care coverage for all citizens. Dvir stresses the growing complexity and severity of long-term care needs, urging a balanced risk-sharing model among the state, health funds, and insurers. She also calls for long-term regulatory certainty to enable insurers to price risks accurately and commit to sustained operations.

The financial burden on families when a member becomes dependent is substantial, often risking economic collapse. Without adequate public intervention, these costs could devastate households. Experts emphasize that ensuring reliable insurance coverage is not only a moral imperative but also a strategic investment in Israel’s economic resilience. They urge policymakers to seize the current opportunity to implement reforms that secure the system’s future viability and protect vulnerable populations.