the differences between private health insurance and HMO services.

Many people wonder about the differences between private health insurance and HMO services. Is it better to choose the basic basket of services or complementary services (Shaban)? It can be confusing.

Let’s break it down:

  • Government Health Services (HMO): This is the basic layer of medical services available to every citizen in Israel at HMO clinics, either for free or at a basic cost.
  • Complementary Services from Health Funds (Kupot Holim): Each health fund offers additional health services for a monthly fee. This can include choosing a specific surgeon, supplementary medicine, dental care, consultations with specialist doctors, and various tests.
  • Private Health Insurance from Insurance Companies: Insurance companies offer private policies that typically include four main components: surgeries (with a choice of surgeons), medications from the approved drug list, consultations with specialists, and access to tests and transplants.

There is some overlap between the last two options, especially in the area of surgeries. Surgery coverage is usually the most expensive part of private health insurance, often exceeding 50% of the total cost.

Health insurance

There are two types of surgery policies in the private health insurance market:

  • “Complementary via Shaban”: The insured person contacts the HMO through Shaban (additional health services), and the HMO offers the option to choose a surgeon affiliated with them. The private insurance of complementary via Shaban provides an additional layer, reimbursement of self-participation fees. If the chosen surgeon or hospital is not affiliated with the HMO, the insurance company provides approval for the surgery, and if the surgeon or hospital works with the same insurance company, the company confirms the surgery without additional costs.
  • “First Shekel Insurance”: This process bypasses the HMO. The insured person contacts the insurance company directly, chooses a surgeon from the company’s list, and receives full funding without self-participation fees.

Advantages of “First Shekel Insurance” include no self-participation fees, less bureaucracy, faster processes, and access to advanced medical technologies not available through HMOs.

The advantage of “Complementary via Shaban” is the lower cost, usually about 30% cheaper than “First Shekel Insurance.” However, the price difference may decrease for younger individuals and become more significant for older individuals.

Insurance companies are working to bridge these gaps, offering various plans with full self-participation refunds or direct access to surgeries without going through the HMO.

In summary, people with health insurance policies before 2016 won’t be affected. Those looking to purchase a new policy or who purchased one after 2016 and are undecided whether to stick with “First Shekel Insurance” or switch to “Complementary via Shaban” should consult with an insurance agent familiar with the field in real-time.