How is Israeli Healthcare Funded?

Israel’s healthcare system is consistently ranked among the most efficient in the world. Grounded in principles of universality, accessibility, and high-quality care, it provides comprehensive medical coverage to all legal residents under the National Health Insurance Law (חוֹק בִּיטּוּחַ בְּרִיאוּת מַמְלַכְתִּי), legislated in 1994.

The system operates as a hybrid model, combining public funding and regulation with decentralized service delivery. Universal coverage is guaranteed by the state, while care is delivered through four competing health maintenance organizations (HMOs), known locally as Kupot Holim (קֻפּוֹת חוֹלִים): Clalit, Maccabi, Meuhedet, and Leumit. Each HMO manages its own network of clinics, hospitals, and specialty services within a nationally regulated framework designed to ensure equity and affordability.

Every resident is insured through mandatory monthly contributions to the National Insurance Institute (בִּיטּוּחַ לְאוּמִּי). Individuals may choose any HMO regardless of age or pre-existing conditions and may switch plans over time. All HMOs are legally required to provide an identical basic Health Services Basket (סַל הַבְּרִיאוּת), which defines a standardized list of essential healthcare services and treatments available to all residents.

What is the Health Basket (סַל הַבְּרִיאוּת)?

The Health Services Basket (סַל הַבְּרִיאוּת) defines the full range of medical services, medications, equipment, and medical devices to which insured individuals are entitled under the National Health Insurance Law 1994. In general, services included in the basket are provided free of charge, except where legally defined patient co-payments (הִשְׁתַּתְּפוּת עַצְמִית) apply.

It is important to understand that medications and treatments are included in the Health Services Basket only for specific, clearly defined eligibility criteria. A patient must meet these criteria in order to receive public funding or subsidy. Coverage is therefore not determined solely by the name of a drug or procedure, but by whether the individual clinical indication and the conditions set by the basket are fulfilled.

Areas of Health Services Included in the Health Basket

• Personal preventive medicine and health education 

• Medical diagnosis 

• Ambulatory medical care, including mental health services (in clinics, at home, or in supervised residential facilities) 

• Hospitalization: general, psychiatric, psychogeriatric, and chronic nursing 

• Medical rehabilitation, including psychological rehabilitation, physiotherapy, speech therapy, occupational therapy, and health-related social work 

• Provision of medications 

• Medical devices and assistive medical equipment 

• Preventive dental care for children (up to an age determined by the Ministry of Health) 

• First medical aid and medical transportation to hospitals or clinics 

• Occupational health services 

• Medical and mental health treatment for drug and alcohol addiction rehabilitation 

• Dental health services

How is the Health Basket funded?

The government is responsible for funding the Health Services Basket (סַל שֵׁרוּתֵי הַבְּרִיאוּת), which accounts for the majority of the state’s annual health expenditure. In 2019, total national health spending in Israel was approximately 68 billion shekels. Of this, 53.4 billion shekels were allocated to the Health Services Basket and transferred to the Health Funds (קֻפּוֹת חוֹלִים) to finance the mandatory services and treatments provided to the public.

The remaining portion of the national health budget is allocated to services outside the Health Services Basket, including supplementary services, government support and subsidies, maternal health services, and health development initiatives.

This chart details the distribution of the Health Basket budget:

Are the services in the Health Basket fixed?

No, the Health Basket is updated annually through a structured adjustment process, with a total budgetary addition of approx. 9–10 billion NIS, depending on the year. This update is based on three main components: a demographic adjustment, which accounts for population growth and aging and the resulting increase in healthcare needs; a technological adjustment (approximately 0.5 billion NIS), intended to fund new medical technologies and medications in response to evolving clinical practice; and a cost-of-living adjustment (approximately 1.1 billion NIS), which reflects rising healthcare costs such as salaries, medical equipment, and other essential inputs.

Note: once an item is added to the Health Basket, it is not removed.

Who Decides What Is Included in the Health Basket?

Decisions regarding additions to the Health Basket are made by the 'Public Committee for the Expansion of the Health Services Basket' (הַוְּעָדָה הַצִּבּוּרִית לְהַרְחָבַת סַל שֵׁרוּתֵי הַבְּרִיאוּת), an independent public committee that convenes once a year. The committee is non-political and operates independently of the government. Its members include senior physicians from a range of specialties, representatives of the healthcare system, the Ministry of Finance (מִשְׂרַד הָאוֹצָר), and public representatives from fields such as ethics, economics, and social welfare.

The 2026 Committee was chaired by Prof. Dina Ben-Yehuda, Head of the Hematology Division at Hadassah Medical Center, and coordinated by Prof. Asnat Luxenburg, Head of the Medical Technologies, Information and Research Division at the Ministry of Health. The committee includes 16 senior members from leading roles across health funds, universities, and hospitals. Notably, Rabbi Yosef Zvi Rimon, who some readers may recognize, serves on the committee this year, reflecting the inclusion of ethical and societal perspectives alongside clinical and economic expertise.

Deciding what to add to the Health Basket is a complex process involving significant ethical trade-offs and competing priorities. The committee must balance the needs of sick patients against those of the healthy population, compare different diseases, and weigh prevention versus treatment, life extension versus quality of life, and the needs of many versus a few. Socioeconomic considerations and potential conflicts between patients, physicians, and pharmaceutical companies further complicate these decisions.

What is the process for expanding the Health Basket?

Each year, the process begins with a Call for Submissions (קוֹל קוֹרֵא), inviting proposals to add medications and medical technologies to the Health Basket. Submissions may be submitted by hospitals, Health Funds (קֻפּוֹת חוֹלִים), units within the Ministry of Health (מִשְׂרַד הַבְּרִיאוּת), patients and patient advocacy organizations, and pharmaceutical companies. Approximately 400 submissions are received annually.

All proposals are reviewed by the Public Committee for the Expansion of the Health Services Basket (הַוְּעָדָה הַצִּבּוּרִית לְהַרְחָבַת סַל שֵׁרוּתֵי הַבְּרִיאוּת). Submissions are evaluated based on medical benefit, strength of clinical evidence, ethical considerations, cost-effectiveness, budgetary impact, and broader societal priorities. Recommendations are formulated within a government-defined budget framework , which inherently limits the number of technologies that can be approved each year.

This final list of recommended services and medications for government approval must be approved unanimously by the committee, requiring the signature of every member.

The committee completes its work toward the end of the calendar year, after which the government formally approves the list. The updated Health Services Basket officially comes into effect at the start of the following year. Although implementation by the Health Funds may take several months, coverage is applied retroactively from the new year.

How do I check what's included in the Health Basket?

The Kol Habriut website is the official Ministry of Health platform for checking eligibility for medical services, medical devices, and medications. It provides clear information on coverage within the basic Health Services Basket, as well as eligibility under supplementary HMO (kupah) insurance plans.

Kol HaBriut

Additionally, the Israeli Drug Registry lists all approved medications and clearly indicates whether each is included in the Health Services Basket (sal).

Israeli Drug Registry

What happens if a medication is NOT included in the Health Basket?

There are several pathways to access medications and services that are not included in the basic Health Services Basket (סַל שֵׁרוּתֵי הַבְּרִיאוּת), including private health insurance, supplementary HMO insurance (בִּיטּוּחַ מַשְׁלִים / שַׁבָּ״ן), and charitable funding.

In exceptional circumstances, particularly for prohibitively expensive treatments, a patient who is not eligible for coverage under the Health Basket may apply to an Exceptions Committee (וַעֲדַת חֲרִיגִים). The committee weighs the individual uniqueness of the case against the need to avoid setting precedents, as Health Funds (קֻפּוֹת חוֹלִים) are legally required not to discriminate between patients in comparable situations. In some cases, patients who have privately funded an expensive treatment and demonstrated clinical benefit may receive approval for continued coverage through this mechanism.

Each HMO operates its own Exceptions Committee within the organization. The committee is composed of several members, including physicians. Patients may appear before the committee in person or submit a personal written statement, often with the support of their medical team. Decisions must be reasoned, and all committee materials are accessible to the patient. Decisions of the Exceptions Committee may be appealed to the Labor Court, reflecting the status of the National Health Insurance Law (חוֹק בִּיטּוּחַ בְּרִיאוּת מַמְלַכְתִּי) as social legislation.

What Is Tofes 29 Gimmel — Section 29(c)? (טוֹפֶס 29ג׳)?

This is a term you may have heard before, and it is important to clarify it, as it is can be misunderstood. Section 29(c) (סְעִיף 29(ג׳)) relates to medications that are not registered in Israel, or to the use of registered medications for non-approved (off-label) indications.

Drug registration determines whether a medication is legally approved for use in Israel. Registration is indication-specific, and each pharmaceutical company must separately register its own branded or generic version of a drug. If a medication is not registered in Israel, it cannot be used routinely. In such cases, a Section 29(c) application (טוֹפֶס 29ג׳) must be submitted.

A Section 29(c) application is a special authorization process that allows:

• use or importation of medications not registered in Israel

• use of registered medications for non-approved indications

The application must be patient-specific, clinically justified, and supported by evidence-based medical literature. The recommending physician assumes responsibility for the treatment and must obtain approval through the appropriate pharmaceutical and regulatory channels within the Health Fund (קוּפַת חוֹלִים), hospital, and/or Ministry of Health (מִשְׂרַד הַבְּרִיאוּת) before the medication can be supplied.

NOTE: This is distinct from whether a medication is listed in the Health Services Basket, which determines only whether the medication is publicly funded. A Section 29(c) approval does not confer inclusion in the Health Services Basket and does not create entitlement to public funding. Conversely, a medication may be legally registered in Israel but not funded by the Health Services Basket.

Summary

Israel’s healthcare system is an exceptional model that weaves together public funding and private delivery to provide accessible, high-quality medical care to all residents. The funding mechanisms and behind-the-scenes structures that make it work sit at a fascinating intersection of medicine, governance, and ethics. Understanding how the Health Services Basket operates, who is entitled to what, and how to navigate the system is essential for every physician practicing in Israel.

We hope this blog helped clarify some of the complexity.

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