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The impact of health care costs on insurance

Visit a public medical center or hospital in Hong Kong and you will be paying the same general amount as every other person who seeks medical care from the public sector. After all, the Hong Kong Health Authority publishes the health care costs and charges levied at all public facilities. This, in turn, makes it easier to judge what you are going to be billed when you visit these facilities.

Visit a private clinic, however, and you will find some with high health care costs. Some will be close to what the public centers charge, while others will charge 10 times that amount or more. It’s true that many of the private centers will offer better and more personal care, but the reality is, private medical costs in Hong Kong have been skyrocketing in the past decade, and will continue to do so into the near future.

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There are many reasons as to why costs are going up including increased usage and a general lack of regulation when it comes to prices. But, there are two other influential reasons that have been recently highlighted by various news sources, including The Standard in Hong Kong.

Reason 1: Doctors (some, not all) are charging the maximum that a patient’s health insurance will cover

In the insurance industry, this can be referred to as overage largely because fees levied are over what they normally would be because the doctor or clinic knows the insurance company will likely pay for it.  

The article in the Standard notes that, “Some doctors charge according to the maximum insurance claims that their patients can make, the Hong Kong Federation of Insurers revealed.” While not technically illegal in Hong Kong, there is a serious moral and business issue if doctors are indeed charging based on a patient’s insurance coverage.

In our experience, this case often arises with returning patients largely because doctors would not normally know a patient’s insurance limits when they first visit the clinic.

Reason 2: The number of claims submitted to insurers has drastically increased

According to the article above, “There has been a double-digit rise in the total amount of claims. The amount is up to HK$11.91 billion and the growth will continue.” The article went on to note “medical cost inflation of 8 to 10 percent per annum”. Combine this with Hong Kong’s aging population and we predict that these inflation figures and cost of care can only increase.   

What impact will these reasons have on health insurance premiums?

Overage and increased costs can have a drastic impact on insurance premiums. Many insurers will often offset these increases by simply increasing premiums. This means that you, as the consumer of these products, will be paying more for health insurance. But the question is, how much more will you be paying in the next few years?

Interestingly, in a soon to be published report by Pacific Prime, the average inflation in International Private Medical Insurance premiums in Hong Kong for 2015 was 9.5%, which reflects the average increase in medical costs seen in Hong Kong. In other words, you can expect to see premiums increase at least 10% or more in the coming years.

What can be done to offset the rising cost of health care in Hong Kong

In truth, you are not going to be able to completely escape high healthcare costs in Hong Kong, but there are a number of options currently available to you. One of the most powerful is to simply ‘vote with your feet (or wallet)’ and look for another doctor if you feel that your doctor is charging you too much, or that they may not be acting in your best interest. Luckily, in Hong Kong the vast majority of doctors speak English, so expats do have options. Try looking on websites like hkdoctors, or ask your friends who may be able to recommend a good doctor.

Another option is to talk with the experts at Pacific Prime. Because we work closely with all the major insurers present in Hong Kong we have an in-depth knowledge of common practices. Interestingly, there are a number of insurers out there with strong anti-fraud teams who constantly monitor medical practices and claims, and will take action should they see doctors consistently charging too much or costs rising too high above market standards. These insurers also take pride in their relationships with care providers, having networks of trustworthy clinics and doctors.

We can help advise you on which insurers are best for your needs and suggest a provider and subsequent doctor in their network, or even a plan that will work for you. Contact us today to learn more.

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