Press Releases
Government launches public consultation on Voluntary Health Insurance Scheme
The Government today (December 15) launched a three-month public
consultation on the Voluntary Health Insurance Scheme (VHIS) to consult the
public on implementing a government-regulated, market-operated VHIS.
Speaking at a press conference today, the Secretary for Food and Health, Dr
Ko Wing-man, said that the VHIS is a supplementary financing scheme for
adjusting the balance of public-private healthcare sectors. It enables those
who are willing and able to afford private healthcare services to purchase
value-for-money private health insurance in the market.
He said: "The Government intends to encourage more people to use private
healthcare services through the VHIS. This will help relieve pressure on the
public system, and users of public healthcare services can benefit from
shorter waiting time and enhanced service quality, thereby contributing to
the sustainable development of Hong Kong's healthcare system."
Under the proposed VHIS, all individual indemnity hospital insurance
products must comply with the Minimum Requirements prescribed by the
Government. When selling individual hospital insurance, insurers must offer
to consumers a Standard Plan that meets all 12 Minimum Requirements as an
available option, so as to enhance the accessibility and continuity of
hospital insurance, as well as the quality and transparency of hospital
insurance.
According to the estimate of the consultant commissioned by the Government,
due to the enhanced protection offered by the Standard Plan, the average
annual standard premium of the Standard Plan is about $3,600 (in 2012
constant prices) and about nine per cent higher than the average premium of
individual hospital insurance products (general ward level) in the market.
The 12 Minimum Requirements of the Standard Plan are:
(1) guaranteed renewal with no re-underwriting;
(2) no "lifetime benefit limit";
(3) coverage of pre-existing conditions subject to standard waiting period;
(4) guaranteed acceptance with premium loading capped at 200% of standard
premium for –
(i) all ages within the first year of implementation of the VHIS; and
(ii) those aged 40 or below starting from the second year of implementation
of the VHIS;
(5) portable insurance policy with no re-underwriting when changing insurer,
provided that no claims were made in a certain period of time (say, three
years) immediately before transfer of policy;
(6) benefit coverage must include medical conditions requiring hospital
admissions and/or prescribed ambulatory procedures;
(7) benefit coverage must include prescribed advanced diagnostic imaging
tests (subject to a fixed 30% co-insurance to combat moral hazard); and
non-surgical cancer treatments up to a prescribed limit;
(8) benefit limits must meet prescribed levels;
(9) no cost-sharing (deductible or co-insurance) by policyholder except the
fixed 30% co-insurance for prescribed advanced diagnostic imaging tests; and
annual cap of $30,000 on cost-sharing by policyholder (excluding excess
amount payable by policyholder if actual expenses exceed benefit limits);
(10) budget certainty for policyholder through –
(i) Informed Financial Consent: a policyholder should be informed of
estimated charges and estimated claims amount through written quotation
before treatment;
(ii) No-gap/known-gap arrangement for at least one procedure/test: a
policyholder can enjoy "no-gap" (no out-of-pocket payment is required) or
"known-gap" (a pre-determined amount of out-of-pocket payment) if the
procedure concerned, the institution (e.g. hospital) and doctor selected by
the policyholder are on the lists agreed among his/her insurer and
healthcare providers;
(11) standardised policy terms and conditions; and
(12) transparent information on age-banded premiums through easily
accessible platform (e.g. websites of insurers and the VHIS regulatory
agency to be established).
To ensure that high-risk individuals (i.e. their applications are either
rejected by insurers, or accepted with additional clauses imposed in their
policies excluding their pre-existing conditions, or charged a premium
loading at a rate deemed appropriate by insurers) are able to purchase
hospital insurance complying with the Minimum Requirements, the Government
proposes to set up a High Risk Pool (HRP). The HRP will be supported by
public funding. The HRP will be open to all in the first year upon the
implementation of the VHIS and limited to those aged 40 or below thereafter.
The policyholder shall pay the premium with a premium loading at 200% of the
standard premium prescribed by the insurer. It is estimated that the total
cost to the Government for funding the operation of the HRP for a 25-year
period (2016 to 2040) would be about $4.3 billion (in 2012 constant prices).
The Government also proposes that, where the expiry of the existing
individual hospital insurance policies falls within one year of
implementation of the VHIS, insurers are required to, upon such expiry,
offer an option to policyholders concerned to migrate to an individual
hospital insurance policy that meets or exceeds the Minimum Requirements
without being re-underwritten for benefit coverage and benefit limits in
existing policies. After the aforementioned one-year window period,
policyholders who wish to migrate to compliant policies may be subject to
underwriting if deemed necessary by the insurer concerned. For policyholders
who do not wish to migrate but to renew their policies, whether within or
after the said one-year period, on the same old terms or any other terms
which fall short of the Minimum Requirements, such policies will be
grandfathered, i.e. exempted from the Minimum Requirements as long as the
insurers concerned continue to administer such policies.
Group hospital insurance is not required to comply with the Minimum
Requirements prescribed by the Government. To better protect employees'
interests, the Government proposes to require insurers to offer as an option
to employers an elective component – the Conversion Option – in the group
hospital insurance products. If the employer decides to purchase the group
policy together with the Conversion Option, an employee covered by such
group policy can exercise the Conversion Option upon leaving employment so
that he/she can switch to an individual Standard Plan at the same
underwriting class without re-underwriting, provided that he/she has been
employed for a full year immediately before transferring to the individual
Standard Plan.
In addition, insurers may offer, on a group policy basis, Voluntary
Supplement(s) to individual members covered by a group hospital insurance
policy who wish to procure at their own costs additional protection on top
of their group policy. The group policy, enhanced by the Voluntary
Supplement, should provide insurance protection at a level comparable to the
protection of an individual Standard Plan.
Dr Ko said, "In order to encourage people to purchase VHIS plans, we propose
to provide tax deduction for individual hospital insurance policies
complying with the Minimum Requirements. We will explore the detailed
arrangements after the public consultation."
Dr Ko emphasised that, while taking forward the VHIS, the Government will
continue to uphold the dual-track healthcare system by which the public and
private sectors complement each other. The Government will strengthen its
commitment to the public system and continue to provide a high quality and
efficient healthcare safety net for all.
He said, "The Government's recurrent expenditure on medical and health
services in the past seven years increased from $32 billion in 2007-08 by
over 60% to $52 billion in 2014-15 (public health expenditure now accounts
for about 17% of the Government's total recurrent expenditure); the
Government is also embarking on a programme of public hospitals development,
redevelopment and expansion, including the construction of the Tin Shui Wai
Hospital and the Hong Kong Children's Hospital, expansion of United
Christian Hospital, redevelopment of Kwong Wah Hospital and Queen Mary
Hospital, etc.
"The Food and Health Bureau will also implement various policy initiatives
to complement the VHIS, including strengthening the regulation of private
healthcare facilities, enhancing the capacity of private healthcare services
and reviewing healthcare manpower planning. If the community supports the
VHIS proposal, we will proceed with legislative procedures in order to
implement the proposal."
Copies of the VHIS consultation document are available for collection at
district offices or can be downloaded from the VHIS website (www.vhis.gov.hk).
The public can send their views on this consultation document on or before
March 16, 2015, by email (vhis@fhb.gov.hk),
by post (Healthcare Planning and Development Office, Food and Health Bureau,
19/F, East Wing, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong
Kong), or by facsimile (2102 2525).
Ends/Monday, December 15, 2014
Issued at HKT 16:31
NNNN