How did the mental health insurance reform affect the financial protection of Israeli households?

Background

The mental health insurance reform came into effect on July 1, 2015, including mental healthcare (MH) into the public benefits package by transferring responsibility for funding and providing mental healthcare from the Ministry of Health to the health plans (HPs). Its goals included improving financial access – the ability to receive quality services without experiencing financial hardship.

Objectives

To characterize the trend of households’ financial hardship resulting from using MH in the community, measured by the rates and amounts of out-of-pocket (OOP) spending, and to examine the impact of the reform on this hardship.

Methods

A descriptive analysis of data from the Central Bureau of Statistics’ Household Expenditure Surveys in the years 2008-2022. The dependent variables analyzed were: (1) share of households with annual spending on MH (intervention group) and share of households with annual spending on rehabilitation care (control group) out of the total of all households each year; (2) the average annual spending among households with spending on these services. Two DID analyses were performed.

Findings

Both the share of households spending on MH and the amount of spending increased. The share of households spending on MH increased significantly more than the share of households with spending on rehabilitation (from 2.2% to 2.9% compared to 1.6% to 1.8%, respectively), therefore this increase was caused by the reform. The annual spending on MH increased significantly, but the increase was not significantly different from the increase in the spending on rehabilitation. Thus, it is impossible to link this increase to the reform.

Conclusions

The reform has not significantly reduced the financial hardship of households in need of care. Despite the increase in coverage and supply of MH, patients still seek MH privately, with high OOPs. Coverage alone is not sufficient to provide financial protection, and availability of care is as important.

Key messages

• Despite the reform increasing coverage and supply of MH, the public system provides a partial response to demand, and patients seek MH from privately, with high OOPs.

• There is a growing demand for MH, and coverage alone is not sufficient to provide financial protection, availability is as important.