How does the voluntary health insurance scheme work?
The public healthcare services system in Hong Kong has been overstretched for decades, which results in ultra-long queues for operations and medical staff being heavily overworked. With the growth of the aging population, the increasing burdens of chronic diseases, and the hike of medical costs, the local healthcare landscape seems to be facing grim prospects. In light of this, the government has recently unveiled a tax-deductible health insurance solution called the voluntary health insurance scheme (VHIS), in the hopes of enhancing and regulating the existing medical insurance protection and driving patients to turn to the private healthcare system.
In today’s Pacific Prime Hong Kong article, we will divulge the key features and price of this scheme so that you can familiarize yourself with this latest option for healthcare services and retirement planning.
What exactly is the voluntary health insurance scheme?
As a new policy initiated by the government, the voluntary health insurance scheme (VHIS) regulates indemnity hospital insurance plans offered to individuals, with the aim of encouraging citizens to use private healthcare services through hospital insurance and thus relieving the pressure on the public hospitals. In order to participate in the scheme, insurance companies must offer products that meet the following requirements:
Guaranteed renewal up to 100 years of age (without re-underwriting)
This features means that regardless of any change in your health condition, you can rest assured that your policy will continue for up to 100 years old.
No “lifetime benefit limit”
Some insurance policies have a ceiling on how much your insurance company will pay out for non-essential lifetime benefits during your lifetime. VHIS forbids such limitations so your benefits will not lapse before the age of 100 years.
21-day cooling off period
This period protects the consumers so that they can cancel the policy and get a full refund of their paid premium within 21 days of purchasing the plan.
- Unknown pre-existing conditions
These conditions will not be covered in the first year (0%) but will be partially covered in the second year (25%) and the third year (50%) after policy inception and fully covered (100%) afterward.
- Ambulatory procedures, including endoscopy
Day case procedures conducted in day centers will be covered, while prescribed diagnostic imaging tests such as CT scan and MRI scan will also be covered, subject to 30% coinsurance.
- Treatment of congenital conditions
Congenital conditions which have manifested or been diagnosed since the age of 8 will be covered.
- Prescribed non-surgical cancer treatments
Treatment methods such as radiotherapy, chemotherapy and targeted therapy will be covered.
- Psychiatric inpatient treatments in local hospitals
The costs of psychiatric treatment will be covered up to the limit of HK$30,000 per policy year.
To further enhance the incentive citizens to purchase certified insurance plans under the VHIS, the government will allow a tax deduction of up to $8,000 per insured person for relevant premiums paid, including those paid for themselves and their dependents.
So what plans are offered?
Basically, there are two types of VHIS plans, namely standard and flexi. Both types of plans provide individual health insurance that reimburses your actual medical expenses.
For the standard plans, the terms and benefits are standardized with prescribed minimum benefit coverages and amounts. Therefore, as its name suggests, this type of plan only provides for the most fundamental protection.
For the flexi plans, they also have to provide basic protection equivalent to standard plan coverage. But on top of that, they have flexible top-up protection to suit different market needs, subject to certain rules set out by the government. For instance, they may offer enhanced benefit coverages like isolation room or terms and conditions that exceed the minimum standards.
Are you allowed to transfer to a VHIS plan if you wish to?
Yes, on condition that your insurance company has registered to participate in VHIS. Registered insurers are required to provide an opportunity for current policyholders of individual hospital insurance to switch their existing plan to a VHIS certified plan. However, you should note that the specific arrangements and plan for each company will be different.
So how much should I pay for a VHIS plan?
Although premium levels are not regulated, premium schedules are easily accessible on government site and websites of insurers so that consumers can easily compare different premiums for their interests.
Despite the relatively high premium transparency, those on the hunt for a VHIS plan should also pay attention to possible premium differences under different payment modes (e.g. credit card, cash), premium discounts, the premium difference between smokers and non-smokers, and premium loadings due to higher health risks of insured persons. To obtain full details of premium information, consulting insurance providers or insurance agents/brokers is still the most reliable way.
What’s more to learn about local health insurance options?
With the global insurance market getting increasingly complex, it is crucial that you get updated on relevant news and information, especially if you are seeking to look for an insurance plan (everything from individual insurance, maternity insurance, short-term health insurance, and more) or an employee benefits solution that truly caters to your needs.
Armed with over 19 years of experience and nine offices situated across the world, Pacific Prime Hong Kong is a leading insurance brokerage with in-depth local insurance knowledge and solid experience. Our teams of experts can help you select, manage, execute, and renew your plan from an objective perspective. Contact us today for impartial insurance advice, an obligation-free quote, and a free plan comparison!