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Organization of the Israeli health system and the National Health Insurance Law
The National Health Insurance Law of 1994 established that every resident is entitled to a uniform basket of services through a health fund of their choice, financed by a health tax and the state budget, with the funds paid by a capitation formula – while the Ministry of Health remains regulator, hospital owner and the body responsible for public health.
Why it matters in the exam
Items on this topic test the principles of the law: compulsory insurance for every resident, free choice among the four health funds with no right of a fund to refuse a member, a basket of services updated every year by a public committee, and financing from a health tax collected by the National Insurance Institute alongside the state budget. The capitation formula is tested – allocating money to the funds by the number of members weighted by age, sex and residence in the periphery – which is meant to limit "cream skimming", that is, attracting young and healthy members. Further items deal with the Third Addendum to the law, which lists services the Ministry of Health is responsible for (such as long-term nursing care and some preventive services), the mental health reform that moved responsibility to the funds in July 2015, the children's dental reform, and the funds' supplementary insurance compared with commercial insurance. Also tested is the "parallel tax", an employer payment for health financing that was abolished in 1997. Remember that the Israeli health system is mainly public, yet a sizeable share of national health expenditure is private – co-payments, supplementary insurance and direct payment.
Key points
- The 1994 law guarantees every resident a uniform basket through a fund of their choice.
- The health tax is collected by the National Insurance Institute, alongside state budget financing.
- The capitation formula considers age, sex and periphery and limits cream skimming.
- The basket committee updates the basket every year.
- The mental health reform moved responsibility to the funds in 2015.
Summary table
| Body | Role | Exam point |
|---|---|---|
| Ministry of Health | Regulation, planning, hospital ownership, public health and district health offices | Responsible for Third Addendum services |
| Health funds (four) | Insure and provide services according to the basket | May not refuse a member; free choice |
| National Insurance Institute | Collects the health tax and transfers it to the funds | Does not provide medical services |
| Basket committee | Recommends each year which technologies to add | Weighs benefit, cost and social considerations |
| Capitation formula | Allocation of money by age, sex and periphery | Limits cream skimming |
| Supplementary and commercial insurance | Cover beyond the basket | Supplementary insurance is open to all fund members; commercial insurance may select by health status |
A free exam question
מה מבין הבאים לא מהווה אחד התפקידים של משרד הבריאות? (the question as examined, in Hebrew)
- א. התארגנות לשעת חירום
- ב. פיקוח ובקרה על בטיחות בריאותית של מוצרי מזון
- ג. פיקוח על זיהום מים
- ד. פיקוח על ביטוחי בריאות פרטיים
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Sources
- Israel, National Health Insurance Law (חוק ביטוח בריאות ממלכתי), 1994, as amended — Rights, basket of services, health funds, financing
- Rosen, Waitzberg & Merkur, Israel: Health System Review (Health Systems in Transition), 2015 — Organization and governance; Financing
- Israel Ministry of Health, Public Health Services, current — Responsibilities of the ministry and district health offices
Sources are given for further reading; the text is written afresh and not copied from them.
Reviewed by the Examqo AI Professor · 2026-11-06. The text may contain errors; when in doubt, check the source.