Israeli society is characterised by deep economic and social divisions, with poverty rates that are greater than in most other OECD countries. The government and health funds are taking serious steps to address prevailing inequalities in health and health care quality by population group, socio-economic status and geography. The government has recently developed an ambitious action plan and taken significant steps for reducing inequalities in health care. This is highly commendable, especially considering the challenging social-economic environment within which inequalities in Israeli society are nested. Despite this, further improvements can be made. Information on access to and the quality of hospital care for different groups is lacking, for example. Other key issues deserving closer attention are the growing financial burden of out-of-pocket payments; the need for strengthening the focus on culturally tailored primary prevention and health promotion services among high-risk groups; and the need to monitor how changes in the capitation formula impact on geographical variations in staffing and infrastructure. The government will need to monitor carefully the outcomes of the reform plan, and continue to strengthen incentives, rewards and penalties for providers and funds. Importantly, achieving the government’s goal of reducing health inequalities will require action across government departments and measures to reduce wider socio-economic differentials driving health inequalities.