Plan aimed at helping young people to buy health insurance is withdrawn

A plan to use a HK$50 billion reserve to subsidise early entrants to the Health Protection Scheme has been withdrawn

PUBLISHED : Wednesday, 05 June, 2013, 12:00am
UPDATED : Wednesday, 05 June, 2013, 3:34am

A plan by the previous government to use money from a HK$50 billion reserve to help young people buy medical insurance has been withdrawn, lawmakers heard yesterday.

Health official Richard Yuen Ming-fai said young people who bought their policies early under the government's standardised private medical plan would get a low price that would be guaranteed for life, whereas if they waited they would have to pay more.

But legislators were not convinced that without the 30 per cent subsidy proposed earlier, young, healthy people would bother to join the Health Protection Scheme (HPS).

The average cost of premiums for the plan is expected to be about HK$3,600 a person a year, varying with age.

This figure is up from the average HK$2,000 to HK$3,300 at present, with insurers not having to meet the government's minimum requirements.

Yuen, the permanent secretary for food and health, said that a new budget plan would be drawn up later this year to decide the future of HK$50 billion set aside by the previous administration to kick off the reform. The new plan, he said, "would definitely require much less".

"Young people can buy their own medical insurance plans as early as possible so they can get a bargain price … guaranteed for life," he told a meeting of the Legco health panel scrutinising the scheme.

"But if they join the plan later, say in middle age, they would have to bear a higher price," Yuen said.

He also said the 30 per cent subsidy might have caused the government to end up putting money into the pockets of insurers.

"We would have had to supervise the price of the insurance plans in the market too," he said. "I believe it is something the industry would not want to see under a free market."

In response to lawmakers' criticism that the government had backed down from pushing private hospitals to set fixed package prices, Yuen said the scheme would encourage private health-care providers to improve price transparency because of competition.

Lawmaker Peter Cheung Kwok-che disagreed.

"How can you ensure there is competition?

"What if the 11 private hospitals raise their price together? In the end, the hospital may earn it all and users will have to bear a high medical cost."

Insurance-sector lawmaker Chan Kin-por criticised the government for "fearing to touch the private hospitals, while putting all the pressure on the insurance industry".

He added: "This is outrageous and unfair to our industry."

Chan said he was "shocked" by the new HPS, as it would prevent insurers from providing cheaper and different qualities of products to fit the needs of their customers.