Israel's 1996 health Insurance Funding

5 February 1996

The shortfall in Israel's national health insurance funding in 1996 is between NIS300 million and NIS855 million ($95.8-$273 million), according to the Ministry of health.

There are two ways to estimate the costs of the NHI benefits package (basket) for 1996, notes the Marketletter's local correspondent; updating it for population increase, aging and new technologies, as the MoH suggests (totaling 6%) gives a cost of NIS16.3 billion, while updating for inflation in the health sector gives a total of NIS15.6 billion. However, total income is expected to be only NIS15.2 billion, so the potential 1996 shortfall could be NIS400 million-NIS1.1 billion. The Treasury disputes this, saying the 1996 deficit will be NIS100 million maximum.

The key point for the government is that health care organizations and providers understand that there is a global health care budget which is not a direct function of expenses, otherwise the sick funds and hospitals will have no incentive to keep costs down. The funds see it differently, claiming that as the NHI Law requires them to provide a certain benefits package, the government is obliged to ensure that their income is sufficient. The Treasury proposes a change in the NHIL, requiring the funds to earmark any financial surplus for use when there is a shortage and for spending in priority areas defined by the MoH and the Treasury.

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