Grant better tax exemptions to grow Hong Kong voluntary health insurance, industry official urges

But patients group concerned about using public money in private market as system is strained

PUBLISHED : Thursday, 05 January, 2017, 12:29pm
UPDATED : Thursday, 05 January, 2017, 12:29pm

The insurance sector is calling for more attractive tax exemptions for Hong Kong’s voluntary health insurance scheme after the government’s proposal was watered down.

But Elaine Chan Sau-ho, deputy chairwoman of the Federation of Insurers’ task force on health care reform, added that tax concessions would also have to be granted in parallel with regulatory control.

Speaking on an RTHK programme on Thursday, Chan disagreed that dropping two controversial items from the planned scheme amounted to a “victory” for the industry. She insisted insurers took a “neutral” position.

It was recently revealed the government would drop two controversial requirements from the scheme’s original 12 amid strong resistance from the industry.

One included not having to cover high-risk patients or guarantee to cover anyone regardless of age or illness – known as a “high-risk pool”. The other requirement stipulated all policies be made portable.

“I believe the requirements give many people a peace of mind knowing their insurance plans must comply with the [remaining] 10 requirements and that it is all transparent,” Chan said. Compliance with the 10 criteria would push up premiums by about 1 per cent, she added.

“But this peace of mind isn’t enough. There must be an additional reasoning and that is a tax incentive … these tax exemptions can be implemented to attract more buyers.”

It is understood the latest update to the scheme would allow tax concessions for people who select health insurance plans that meet the 10 remaining requirements.

Peace of mind isn’t enough. There must be an additional reasoning and that is a tax incentive
Elaine Chan, Federation of Insurers

But according to a government consultation paper in 2014, the average tax benefit estimated for an eligible taxpayer could be only about HK$450. Those who earn less income could receive a tax break of just HK$20, according to the Post’s earlier estimation.

Details of the finalised plan are expected to be presented to the Legislative Council health services panel on January 16.

Alex Lam Chi-yau, chairman of Hong Kong Patients’ Voices, expressed concern about using public money in the private market at the expense of the underresourced public health care system.

Speaking on the same programme, Lam also did not believe removing the high-risk pool would increase the number of those who are insured.

“The concept is to insure oneself,” he said. “Government can encourage them to buy insurance but at the same time they must also improve the [public] health care safety net.”

The authorities state the scheme’s aim is to reduce the burden on the public health care system by encouraging the middle class to switch to the private sector.