How changes in January 2014 will affect new private health policies

How changes in January 2014 will affect new private health policies

By Danny Newman, Branch Manager – Beit Shemesh, Goldfus Insurance

It is important to read the following article before the end of December 2013 if you are considering private health insurance, have recently made Aliyah or have new additions to the family who are not yet covered on your existing health policy.

When reviewing private health insurance policies in Israel, there are three main components which are usually included in all plans and by all insurance providers.

1. Cover for medicines not included in the health basket (through your Kupat Cholim)
2. Transplants (worldwide cover due to the limited number of organs and donors in Israel).
3. Operations on a private basis, either abroad or in Israel, depending on the terms and conditions of the policy purchased.

Private health policies can provide cover for procedures or treatments not covered, or only partially covered, by the kupat cholim.

Many surgeons in Israel work both privately and with Kupot Cholim. Some people may choose to wait for their preferred surgeon or use an alternative surgeon through their Kupat Cholim, rather than activate their private policies immediately. Up until now, insurance companies were able to financially compensate their clients for not using their private plans when they could have done so, thereby costing the insurance company less than what they would have had to pay out.

While this proved to be an unexpected bonus for those not activating their private insurance plans, there was a concern that some people may not opt for the best medical procedure in order to “cash in” for not fully using the private insurance plan they hold.

So what are the changes?

Irrespective of the reasons, the Controller of Insurance in Israel recently sanctioned amendments that would prevent the insurance companies from continuing to provide policies such as these and has stated that they cover “all or nothing” (i.e. either making payment for the private procedure according to the terms and conditions of the policy or nothing at all). Policies purchased before the end of December 2013 will not be affected by these changes.

As a result of these changes that are scheduled for 1^st January 2014, more people will end up utilizing their private insurance plans as they will no longer be able to “cash in” for opting not to use them. This will lead to insurance companies paying far more in claims, which will inevitably lead to increased premiums for health plans sold after these changes come into effect. Despite this technicality, the main levels of coverage will remain the same, covering treatments which are not covered partially or fully through the Kupat Cholim.

What are the implications?

If you are considering the various private supplementary health insurance plans in Israel, now is the time to investigate your specific options. Should it be relevant, purchasing a policy in the last month of 2013 will secure cheaper premiums for the life span of the policy before the new regulations come into effect.

What should be my next step?

If you have an existing private health insurance policy, it is recommended to sit with a professional who is familiar with these changes, to ensure that you have the correct level and type of insurance in place, and that all family members have been included.

For those who have yet to purchase a private health insurance policy, it is worthwhile arranging a meeting with your insurance agent to learn more about the various levels of cover in order to determine which plan is best for you.

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