The Effectiveness of the Proposed Health Protection Scheme is Highly Doubtful


The Hong Kong Federation of Insurers (HKFI) today (Friday, 6 December 2013) expressed serious doubt about the effectiveness of the proposed Health Protection Scheme (HPS) in alleviating the burden of the public system. 
A recent industry survey conducted by the HKFI's Medical Insurance Association has clearly shown that:

"With the vibrant private health insurance market offering a raft of protection to suit the different needs of policyholders, we do not see any extra value of the proposed HPS except restricting the choice of consumer," said Mr David Alexander, Chairman of HKFI's Task Force on Health Care Reform.  "We have reasons to doubt the take-up rate of the proposed HPS and how it is going to shift patients to the private hospital from the public sector."
Given that Hong Kong enjoys a robust and efficient insurance market, the insurance industry is deeply concerned about the lack of consumer choice under the proposed HPS:

"The HKFI is committed to facilitating the provision of high quality and affordable healthcare services to the people of Hong Kong," said Ms Vivian Choi, Chairman of HKFI's Medical Insurance Association.  "If consumer choice is duly protected, the market will grow in a healthy way, thus providing better environment for medical insurers to improve our existing products and market practice by standardizing policy terms, applying less exclusion, expanding the coverage to inpatient and/or ambulatory care, refining policy terms, enhancing transparency of premium rate and the claims process in line with consumer expectation."

Medical Insurance Business Statistics - Reimbursement Products

Source: HKFI Medical Insurance Association

  1. Hong Kong's private group and individual indemnity medical insurance plans are providing various forms of protection to more than three million people in Hong Kong;

  2. Hong Kong citizens appreciate the value of insurance as evidenced by the increasing number of policyholders by 180,000 per annum over each of the past four years;

  3. The majority of policyholders used private medical services and directly benefited from private insurance coverage -- about 90% of reimbursed claim cases took place in private hospitals or private day case centres.  This indicates that the majority of the medical insurance policyholders actually used private medical services, contrary to the perception of certain quarters that policyholders rely on the public system for medical services.

  4. Policyholders are adequately protected by private medical insurance albeit medical inflation.  Insurance paid an average $75 for every $100 incurred for hospital admission expenses, and more than $90 for every $100 of day surgery costs. 

    • The introduction of HPS will only restrict consumers' choice and forces them to pay 10% more for medical insurance.  The insurance industry proposes that existing medical insurance products continue to be sold alongside HPS to maintain consumer choice.

    • Individuals with high risk will have no choice but to join the High Risk Pool and pay 3 times the premium or remain in the public system.  However, in the existing market, they have the choice to buy a policy without loading but with an exclusion of a particular illness.  They can utilize a private hospital for majority of the illnesses and the cost is covered by insurance except for those conditions being excluded.