Private Long-Term Care Insurance in Israel

Caring for the elderly and for people with disabilities constitutes a major challenge for health and social services all over the world. In Israel, the state subsidizes care for poor people with disabilities and provides services for them. At the end of 2009, some 139,400 elders received long-term care (LTC) benefits from the National Insurance Institute and 24,000 were living in LTC institutions (for nursing, frail, and mentally frail patients).

The average cost of a 3-year stay in a nursing home was NIS 486,000 in 2011. LTC is very expensive for both the public purse and for the elderly and their families. In view of the limited sources of public funding, there is growing recognition of the need to combine private and public funding to cover the cost of long-term care. Expansion of private LTC insurance (LTCI), which insures against the need for LTC in the community or in an institution, is one of the alternatives currently being discussed by policymakers.

The current study examines the private LTCI market in Israel and analyzes the factors affecting ownership of LTCI policies. The study is based on financial data about the market, the LTCI policies marketed by the health plans, and the main policies marketed by insurance companies, as well as on data gathered through a population survey of 1,700 residents of Israel aged 22+ conducted by the Myers-JDC-Brookdale Institute in late 2006. A comprehensive review of the literature was conducted for an in-depth examination of various aspects of the market.

Among the key issues examined by the study:

  •  The size of the private LTCI market in Israel and the factors affecting LTCI ownership
  •   Individuals’ perception of the probability of requiring long-term care and their assessment of the  consequences, including perceptions about funding the care, if they even needed it
  •  The effect of peoples’ relationship with their children on ownership of LTCI
  •  Tools to increase the knowledge, awareness and educated use of LTCI by consumers

The findings have been presented to the Minister of Health and the Minister of Senior Citizens’ Affairs and to senior officials at both ministries, as well as the Commissioner of Insurance and senior members of the division and to the executive staff of the Geriatric Department at the Ministry of Health. The findings serve to support and improve the reforms in financing LTC and assist the decision-making processes in this area.

The study was funded with the assistance of the National Institute for Health Policy and Health Services Research.

Citations in the professional and academic literature

Comas-Herrera, A., Butterfield, R., Fernández, J. L., Wittenberg, R., & Wiener, J. M. (2012). Barriers and opportunities for private long-term care insurance in England: What can we learn from other countries?. The LSE companion to health policy, 258-280.

Borowski, A. (2015). Israel’s long-term care social insurance scheme after a quarter of a century. Journal of aging & social policy27(3), 195-214.

Klimaviciute, J., Pestieau, P., & Schoenmaeckers, J. (2018). Long‐Term Care Insurance With Family Altruism: Theory and Empirics. Journal of Risk and Insurance.

Klimaviciute, J., Pestieau, P., & Schoenmaeckers, J. (2019). Family altruism and long-term care insurance. The Geneva Papers on Risk and Insurance-Issues and Practice, 1-15.