Changing the Financial Incentives for Israel's Sick Funds: An Analysis of Policy Options

Reimbursement of the Israeli sick funds, whose status as both insurers and providers of health care is unique, warrants much attention. The paper deals with the issue in detail. Four main channels for reimbursement are discussed: premium payment from members, co‐payments from members, parallel tax payments from the members' employer, and direct government subsidies. For each source, pros and cons are evaluated and suggestions are made for improvement of the reimbursement process in the future.