Hong Kong government is right to be flexible on private health insurance
The principle of insurance is shared risk through pooling of premiums. The more people who join the pool the more viable it is and the more affordable the premium. A high take-up rate is therefore key to any new insurance plan. Hong Kong's proposed and long-awaited voluntary health insurance scheme is a problematic case in point. It is good news therefore that the government and the insurance industry are reported to be negotiating over "concessions" to make the scheme more flexible and potentially more appealing to a wider cross-section of the community.
This follows a public consultation on proposed reforms, aimed at easing the burden on public hospitals of the city's ageing population. Insurers have been critical of the latest proposal because it could push up premiums for health insurance packages by 10 to 30 per cent. They said this would do nothing for the take-up rate.
The government has rightly refused to compromise on its bottom lines of guaranteed acceptance under a standard plan for people with pre-existing conditions and guaranteed policy renewal without re-assessment. But it is to be applauded for exploring possible flexibilities, such as allowing insurers to offer consumers cheaper policies that exclude coverage of their pre-existing conditions. The government also believes it may be possible to lower the required coverage levels for hospitalisation, currently set at HK$650 a night.
We trust the government will seriously consider the industry's demand to offer a wider choice of cheap health insurance packages without compromising the principles behind the scheme. It is only to be expected that younger and middle-aged people are not easily convinced to insure against possible events that seem remote, even though it would cost them more to do so later. More flexible options could be a worthwhile incentive, given that recurrent government expenditure to maintain health care service quality is estimated to rise from HK$52.4 billion to HK$285 billion by 2041.