Although Israel’s birth rate is very high compared to other Western countries, the population is aging rapidly due to high-quality medical care, and life expectancy is expected to continue to rise. The Taub Center for Social Policy Studies in Jerusalem has just issued a report on long-term care (LTC) for the elderly and made suggestions on how to cope with their needs.
The fact that many agencies share responsibility for long-term care provision is a significant issue.
Taub’s Nir Kaidar, Prof. Nadav Davidovitch, and Prof. Avi Weiss described the problems with the existing LTC insurance system based on the findings of the research, and they proposed several policy alternatives to improve services and benefit those who need them.
Over the past decade, the number of those eligible for LTC benefits from private insurance plans and the National Insurance Institute (NII) has almost doubled. The study provides information on the number of Israelis with private LTC insurance, current data on the national expenditure on LTC in recent years, and the number of elderly who are defined as LTC patients and eligible for LTC benefits (private and public).
On average, the population of those aged 75 and over has grown by about 9,000 people per year. 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, the researchers wrote.
“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, each with its bureaucracy.”
Number of Israelis receiving long-term care has almost doubled in 10 years
Over the past decade, the number of Israelis with individual, private LTC insurance has almost doubled – from 0.5 million in 2012 to 0.9 million in 2022.
LTC services provided in the community are primarily financed by the NII, but more than five million individuals pay a private insurance company for a policy. The number of individuals insured through group plans offered by the four public health funds has also grown – from 4.0 million in 2012 to 4.8 million in 2022.
By 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.
As of last December, 346,000 elderly individuals were receiving LTC benefits from the NII, compared to about 180,000 in 2018. This costs 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 Health Ministry, while about 5,000 are looked after in retirement homes that are regulated and supervised by the Ministry of Labor and Social Welfare.
The researchers show that national expenditures 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.
Between 2012 and 2022, the number of elderly people who are defined as needing LTC and who receive LTC benefits from the NII doubled, while the number of recipients of the old-age pension (paid out to an individual when he or she reaches retirement age) grew by only 40%.
Fully 60% of Maccabi Healthcare Services’ members are insured by the health fund, followed by Clalit Healthcare Services at 52%, Leumit Healthcare Services at 38%, and Meuhedet Healthcare Services at 35%.
The health funds’ data show that the proportion of health fund members with LTC insurance also varies by age; the highest rate is found in the 25 and under age group because up to age 18, there is no need to pay a premium to be insured for LTC by the health funds. The 25-to-35 age group has the lowest rate of
LTC insurance at 37%. The rate is higher in the 65-to-75 age group (51%), while there is a drop in the rate in the 75+ age group, which is explained by the cancellation of insurance due to the high premiums.
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-to-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 Leumit. 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.
The researchers present several 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 shortly.
- 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.
Kaidar concluded that “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 concerning long-term care frameworks in general, including the monitoring of aging in the population in Israel and making the necessary preparations for the future.”
