Author: Tamar Friedman Wilson
Eating healthy is too expensive for low income families in Israel
An important factor in maintaining good health is a healthy diet. In Israel, the Ministry of Health recommends the Mediterranean diet, which is rich in vegetables, fruits and whole grains, and low on animal proteins. Based on estimating the cost of such a healthy diet, an average family in the lowest income quintile would need to spend 65% of its income on food in order to eat healthy.
In practice, they spend 42%, meaning that these families, while still spending a substantial portion of their income on food, are either cutting back on the quality or on the quantity of the foods they eat. The wealthiest Israelis in the highest quintile need only spend 7% of their income to afford a healthy diet and, in practice, spend about 10% of their income on food.
Israeli households are spending more on healthcare, primarily due to private insurance plans
The percentage of Israel’s health services funded by the government is 15 percentage points lower than the average percentage in other developed countries. Consequently, private expenditure on health out of total household spending has increased in Israel: from 4.5% in 2000 to 5.7% in 2015. The primary reason for the increase is the purchase of private insurance plans, which rose from 18% of household spending on healthcare in 2000 to 37% in 2015.
This means that Israelis need to spend more out-of-pocket in order to receive the desired care in private settings, even though the care is administered by doctors from the publicly-funded system whose work in the private sphere leaves facilities in the public system underutilized. The current situation is causing inefficiencies in the system, and gaps in access to health services between households of different income levels and between the different geographic regions in Israel persist.
There has been a decline in household spending on preschool for 3-4-year-olds since the Compulsory Education Law was extended
Starting in the 2012-2013 school year, the Compulsory Education Law was extended to cover all 3-4-year-olds, resulting in government coverage of public preschool program costs along with subsidies for many private preschool programs for children of these ages. Due to the increase in government spending, the law resulted in a decline of 11.5% in the average parental payment for 3-4-year-olds specifically. However, at the same time, there was a slight increase in parental spending on daycare for 2-year-olds, such that average household spending per child for all preschool-aged children (ages 2-5) fell by only 3% following implementation of the law.
The main beneficiaries from the universal implementation of the Compulsory Education Law for 3-4-year-olds were middle and upper class households, and not those in the two bottom consumption quintiles. This is because preschool subsidies were already in place for most lower-income families prior to the 2011 social protests.
In Israel, a greater share of the burden of caring for the elderly falls on households than in most other developed countries
The relatively heavy financial burden on Israeli households is clear when considering the public/private breakdown of funding sources for long-term care of the elderly. Israel’s long-term care system stands out for its relatively high share of private spending on care; at nearly 45%, it is almost triple that of the OECD average of 16%. The money that households spend on long-term care is divided among a number of different areas: about 39% of household spending on such care goes to payment for caregivers (often foreign workers), about 37% goes to assisted living facilities, and about 22% goes toward insurance premiums.
Most pressed are middle class households who, on the one hand, cannot afford to hire caregivers or afford privately funded assisted living facilities and, on the other hand, are not poor enough to qualify for state supported institutional care.
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