Govt Pins Hopes On Longer, Wider Insurance Cover

The government on Thursday revealed details of its much-awaited voluntary insurance scheme, which will offer more protection than most existing plans currently on offer and cover policyholders until they reach 100.

Officials estimate the policies to be offered by private insurers by next year will be 15 percent more expensive than similar policies on the market at present, but expect one million people to take up the offer within a couple of years.

Those who take up the offer will get additional coverage that will include unknown pre-existing conditions, congenital diseases diagnosed after they turned eight, and surgical procedures not conducted at hospitals.

Non-surgical cancer treatment will also be covered and the benefit limit will be HK$80,000 per year, while that for psychiatric treatments is HK$30,000.

The companies must also allow the subscribers to renew the plan up to 100 years old. The annual benefit limit is HK$420,000 and there will not be a lifetime benefit limit. This is to respond to criticisms that insurance companies would not let patients renew their plans once they're diagnosed with certain diseases.

The scheme, which has been under discussion for a decade, aims to encourage people to turn to the private medical sector and alleviate the burden on the public healthcare system.

For insurance companies to take part in the scheme, they should offer what's known as a "certified plan" that must comply with a number of requirements, including transparent premiums.

Insurance companies will be given the freedom to set their own premiums, but the government estimates that the average premium would be HK$4,800.

But the Health Secretary, Sophia Chan, insisted the scheme would be attractive as the "certified plans" would come with additional coverage, commonly excluded from plans offered by insurance companies currently.

"We've worked on different requirements of the the voluntary health insurance scheme so that the coverage and protection are better. We think that these better protection items would form an incentive for people who want to buy the voluntary health insurance," she said.

She also said it's difficult to estimate to what extent the scheme could alleviate the workload of public hospitals, but she believes people who have subscribed to the plans would turn to the private medical sector for simple operations. She said this would cut the long queues for services at public hospitals.

Currently, more than two million people have already bought insurance plans. The government estimates that one million people would join the scheme, or migrate their plans to those under the scheme, in the first two years.

The Financial Secretary, Paul Chan, revealed in his budget on Wednesday that people who join the scheme can deduct as much as HK$8,000 from their taxable income, and taxpayers can claim deductions for policies bought for spouses and dependents.