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

Many Israeli families pay for both private surgical insurance and supplementary health insurance from their health maintenance organization (HMO), resulting in significant overlapping coverage 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 these combined policies, with 86% of that amount going to the private insurance. Switching to a supplementary policy that activates only after the HMO coverage is exhausted can cut premiums nearly in half, saving around 4,008 shekels per year, or close to 40,000 shekels over a decade.

The 2024 health insurance reform aimed to close this duplication gap by automatically transferring approximately 636,000 insured individuals from first-shekel private policies to supplementary ones. However, three groups were excluded: those who purchased policies before 2016, those insured via group workplace policies, and those without supplementary insurance. Additionally, about 269,000 people (42% of those transferred) opted out and returned to their old policies. Consequently, most of the 1.65 million holders of first-shekel policies still maintain both types of coverage.

The overlapping coverage mainly involves surgeries, which appear on both lists, while private policies uniquely cover overseas surgeries, transplants, and medications outside the national health basket. The supplementary policies cover complementary medicine, pregnancy tests beyond the basket, and child development. Since the reform, premiums for first-shekel policies have risen sharply, whereas supplementary policy premiums increased moderately, widening the cost gap.

The calculator also warns those holding supplementary policies without active HMO coverage, as these policies assume another payer first and may result in unexpectedly low payouts. Experts advise consulting licensed professionals before changing coverage to avoid losing benefits or facing new waiting periods. The full article was originally published by Bizportal.