• The national expenditure on long-term care in Israel in 2015 was estimated at NIS 14.5 billion or about 1.2 percent of GDP. Public expenditure, which accounts for 0.7 percent of GDP, is lower than the average for the OECD countries, which is 1.3 percent of GDP, even after taking into account the demographic differences between the populations. Nonetheless, in view of the large variation among OECD countries in public expenditure on long-term care, the expenditure in Israel is not especially low.
  • The forecasts for expenditure on long-term care in the long term, on the basis of the current coverage, vary widely: from minimal growth until 2045 up to an addition of one percent of GDP and even more. The main cause of the growth in expenditure is the aging of the population, but the rate of growth is also sensitive to the income elasticity of demand, the extent of the increase in the need for long-term care as life expectancy increases, the increase in the cost of long-term care services and the extent of the decline in the availability of family members to serve as caregivers.
  • For a significant group within the elderly population, the expenditure on long-term care in the community is very high relative to their financial means. These are elderly individuals with low incomes who did not purchase private insurance and do not have savings.
  • The rate of eligibility for public long-term care insurance in Israel is high relative to other countries since the threshold for non-functionality in order to receive long-term care benefits is low. In addition, the means test to receive long-term care benefits makes it possible for elderly applicants up to the eighth and ninth decile to benefit from public insurance. In contrast, the benefit for elderly applicants with a high level of dependency who remain in the community covers a relatively low proportion of the necessary expenditure.
  • In 2015, about 60 percent of the population had some type of private long-term care insurance, as opposed to 5–15 percent in European countries. Forty-eight percent of the population had a collective private long-term care insurance policy issued by the health funds which is under tight regulation.
  • Underinsurance exists in private long-term care insurance, as the premiums are indexed to the CPI while the cost of services is dependent on the cost of labor and of other services, which increase at a higher rate than the CPI. Therefore, it would be more correct to index insurance premiums to wages. Underinsurance also exists for anyone who joined a long-term care insurance plan issued by the health funds after the age of 49, as they are eligible for only partial insurance coverage. In addition, medical underwriting constitutes a barrier to the acquisition of long-term care insurance for the population suffering from a chronic medical condition. In addition, the fact that private insurance generally finances long-term care for a period of only five years is liable to create a situation in which elderly patients who need care for a longer period (primarily the mentally frail) will remain in need of care but without the ability to finance it.
  • The proportion of the Arab and ultra-Orthodox populations who are insured is significantly lower than among the rest of the population, perhaps because they rely more on informal long-term care services.
  • The coverage provided by public insurance to low-income individuals who do not have assets is sufficient but is conditional on the individual being hospitalized in long-term care institutions and on a means test also for their children (which will be cancelled after the reform is approved by the Knesset). This population has an incentive to be hospitalized in a long-term care institution rather than receiving care in the community and this incentive will increase with the cancellation the means test for children.
  • The training qualifications required of long-term caregivers in the community are among the lowest in the OECD countries, while the standards in hospitalization are apparently over-demanding with respect to the quality of medical personnel.
  • The supervision of long-term care services in the community is insufficient and there is a wide gap between the reported number of care hours and the actual hours provided.
  • The setting of a low price for long-term care services by the State contributes to the shortage in long-term care workers and lowers the quality of service. The price structure of long-term care in the home should be reexamined and in addition, the dependence of workers’ wage on the complexity of the care they perform should perhaps be tightened.
  • There is a wide range of policy options to target the problem of affordability of long-term care services and improving their quality. The options require increasing public expenditure on long-term care services, whether to expand public services or to finance private insurance for low-income populations.
  • The wide variation in forecasted expenditure and the uncertainty as to which scenario will be realized emphasizes the advantage of a flexible policy based on the knowledge and experience accumulated in countries where the aging of the population is more advanced.
  • Due to the multiplicity of policy options, their cost, the dispersal of relevant information among the various bodies and the need for institutional modifications among regulators and service providers, it is important that a public committee or a committee of experts be appointed to formulate a plan for national long-term care policy. This document is intended to serve as the basis for the discussions of such a committee, rather than to recommend a single solution to the issue.

For a PDF of the full article in Hebrew​