The population in Israel is aging rapidly and life expectancy is expected to continue to rise. The Taub Center is publishing a study that includes data on long-term care (LTC) in Israel; information on the number of individuals with private LTC insurance; current data on the national expenditure on LTC in recent years; the number of elderly who are defined as LTC patients and who are eligible for LTC benefits (private and public). During the past decade, the number of those eligible for LTC benefits from private insurance plans and from the National Insurance Institute (NII) has almost doubled. Taub Center researchers Nir Kaidar, Prof. Nadav Davidovitch, and Prof. Avi Weiss describe the problems with the existing LTC insurance system based on the findings of the research and propose several policy alternatives that can improve LTC service and will benefit those who need it.
The elderly population in Israel is growing rapidly; however, the responsibility for long-term care provision is fragmented among many agencies
The population of those aged 75 and over has grown on average by about 9,000 individuals per year and life expectancy in Israel continues to rise. Thus, from 1999 until 2021, the life expectancy of a 65-year-old man rose by about three years and that of a 65-year-old woman by three and a half years. The goal of current welfare policy is to enable the elderly to “age in place,” that is, at home and in the community. To this end, a policy is needed that brings together the various providers that deal with the elderly population, however, there is no single body in Israel whose function it is to orchestrate their activity. As a result, the care received by this population — including that intended to maintain function and prevent deterioration in function where possible — is divided among a large number of agencies that do not cooperate with each other, each with its own bureaucracy.
LTC services provided in the community are primarily financed by the National Insurance Institute, although more than five million individuals also have private long-term care insurance
As of December 2023, about 346,000 elderly individuals were receiving LTC benefits from the National Insurance Institute (NII) (as compared to about 180,000 in 2018), which totaled more than NIS 16 billion annually. An in-home caregiver is the main service financed by the NII. In addition, there are about 30,000 LTC patients in out-of-home care frameworks. The majority of them are in nursing homes that are regulated and supervised by the Ministry of Health while about 5,000 are looked after in retirement homes, which are regulated and supervised by the Ministry of Welfare.
Over the past decade, the number of individuals with individual private insurance has almost doubled — from 0.5 million in 2012 to 0.9 million in 2022. The number of individuals insured through group plans offered by the health funds has also grown — from 4.0 million in 2012 to 4.8 million in 2022. In contrast, there has been a significant decline in group policies not through the health funds during the same period — from 0.9 million to about 0.2 million. Since the population has grown during this period, total coverage by private LTC insurance has declined from 69% of the population in 2012 to 60% in 2022.
There has been an increase in national expenditure on LTC alongside a dramatic increase in the number of elderly individuals defined as in need of long-term care
The researchers show that national expenditure on LTC totaled about NIS 23.6 billion in 2022. Most of that was directed toward care provision in the community (NIS 18.7 billion) while the remainder was divided between LTC hospitalization, retirement homes, and complex nursing hospitalization.
The total national expenditure is composed of NIS 16.7 billion in public expenditure (about 71%) and about NIS 7 billion in private expenditure.
A comparison carried out by the researchers of LTC expenditure between 2018 and 2022 shows an increase of about 63% or about NIS 9 billion. The main part of the increase is due to public expenditure on home care, which totaled about NIS 7 billion. The proportion of public financing rose from 63% in 2018 to 71% in 2022.
The number of elderly individuals who are defined as needing LTC and who receive LTC benefits from the NII doubled between 2012 and 2022, while the number of recipients of the old-age pension (which is paid out to an individual when he reaches retirement age) grew by only 40%.
In addition to the increase in the number of recipients of LTC benefits from the NII, there has been a notable increase in the number of recipients of LTC benefits from the insurance companies by means of LTC policies held by the health funds. According to data of the Capital Market, Insurance and Saving Authority, the number of new recipients of private LTC benefits increased by 150% – from 7,000 in 2012 to about 18,000 in 2022.
Substantial variation in the share of those insured between the health funds
The data gathered by the researchers from the health funds and published in the study point to significant variation in the proportion of members with group LTC insurance. Thus, 60% of Maccabi Healthcare Services members are insured with the health fund, followed by Clalit Health Services with 52%, Leumit Health Care Services with 38%, and Meuhedet with 35%.
The health funds’ data show that the proportion of health fund members with LTC insurance also varies by age. Thus, the highest rate is found in the 25 and under age group. This is explained by the fact that up to age 18, there is no need to pay a premium in order to be insured for LTC by the health funds. The lowest rate of LTC insurance is 37%, which is found in the 25–35 age group. The rate is higher in the 65–75 age group (51%) while there is a drop in the rate in the 75+ age group, which is explained by cancelation of insurance due to the high premiums for this age group.
Variation in premiums between the health funds
Premiums rise significantly with age. The average premium is NIS 16 per month at age 30, NIS 114 at age 50, NIS 251 at age 70, and NIS 301 at age 80.
For the 25–50 age group, the highest premium is that of Meuhedet. Above that age, Clalit Health Services has the highest premium. The premium for the 46+ age group is the lowest in the Leumit Health Care Services fund. It should be noted that based on the agreement between the health funds and the Capital Market Authority, premiums are expected to rise in the coming years by more than the increase in the Consumer Price Index.
Prof. Nadav Davidovitch: “The aging of the population is currently one of the biggest health challenges and will continue to be so in coming decades. As we show in the research, the current structure of long-term care insurance — apart from being unsustainable — suffers from numerous problems and exacerbates health inequality between various population groups. There is an urgent need for structural change in order to resolve this situation.”
The researchers present a number of policy alternatives that primarily relate to private LTC insurance:
Compulsory saving for LTC – Every resident could be required to save a monthly fixed amount or percentage of income to finance future LTC needs.
Making the health funds’ LTC insurance compulsory – This would be expected to significantly increase the number of individuals who pay a monthly premium and would broaden the base of young premium payers who are not expected to require LTC in the near future.
Another alternative relates to public LTC insurance. The researchers suggest that enlarging the LTC component within the NII monthly payment would allow increased prevention efforts and additional hours of assistance for individuals requiring the highest levels of LTC.
Nir Kaidar, one of the researchers: “The dramatic increase in the number of those eligible for long-term care benefits and the jump in the number of private insurance claims require a rethinking with respect to long-term care frameworks in general, including the monitoring of aging in the population in Israel and making the necessary preparations for the future.”
The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.
For details, or to arrange an interview, please contact Nir Kaidar: 050-6242474.
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