Important health insurance terms to know
These days, if you would like to receive care at private hospitals or clinics in Hong Kong, you pretty much require private health insurance to help offset the ever increasing costs. This can come as quite a shock to expats coming from countries that have public health insurance, or those moving here without company sponsored health insurance.
The health insurance industry itself is highly complex, with tons of plans, providers, coverage elements, etc. Like many other industries there are a number of ‘buzzwords’ used by insurance companies that can be quite confusing to any person looking for health insurance. While we can’t cover every single buzzword out there, we can cover the most important ones that people in Hong Kong should be aware of. As such, here are 11 important health insurance terms people considering purchasing a plan in Hong Kong should be aware of.
One of the first questions insurance providers will ask regards your premium. In short, the premium is what you will pay for the insurance plan. In Hong Kong most health insurance providers will quote either a yearly or semi-annual premium in either HKD or USD. Other providers may quote a yearly premium, but allow you to set payment dates. For example: pay every month, every six months, or even once a year. It is usually up to you to select when you would like to pay.
One thing to be aware of with premiums in Hong Kong is that they are usually adjusted up at the beginning of each year. If you see that your provider has increased premiums, what this means is that you will pay the higher premium when you go to renew your plan. For example, if you sign up for health insurance coverage for 12 months, pay every month, and the insurance company increases premiums half way through your contract, you will not have to pay the higher rate until you renew your contract at the end of 12 months.
Deductible, Copay, and Coinsurance
These are three terms that focus around the premium you will be paying for your health insurance plan, and are often used by providers when suggesting ways to reduce or adjust your premium.
The deductible on plans is the amount of money you must pay, usually on an annual basis, before health insurance will kick in. For example if you have an annual deductible of HKD 10,000 you will need to pay this much before your health insurance provider will allow you to submit claims.
Generally speaking, plans with higher deductibles will have lower premiums. This can be appealing to some people, especially those who are currently healthy, but this can be a risky choice for others. The key here is to find a balance between premium and deductible that you are comfortable with.
Copay, on the other hand, is the amount you must pay each time you submit a claim after the deductible has been met,. For example, if you sign up for a plan with a HK$100 copay, you will need to pay this much each time you visit the doctor and submit a claim to insurance.
Coinsurance is quite similar to copay. Only, instead of a set dollar amount, it is a percentage. Some providers will actually use slightly different wording when it comes to coinsurance. For example, some will refer to their plan being an 80/20 coinsurance plan. This means that for every bill you will pay 20% of the value, while the insurer pays 80%.
As with deductibles, coinsurance and copay can be implemented into plans in order to reduce your premiums, but this can be risky for some, especially if there is potential for a large number of doctor visits in a year, or if you are on a tighter budget.
Explanation and Table of Benefits
These two terms are used to describe benefits. The table of benefits is a document that insurers provide that contains an in-depth overview of the benefits covered by your plan and the ‘small print’ around the plan, which often includes information like exclusions and plan limitations.
Explanation of benefits on the other hand is usually a reconciliation that is provided after you submit a claim. These often include what was covered by the insurer, how much they paid, and how much you paid.
When it comes to health insurance, providers will develop plans that will generally meet the coverage needs of the majority of the population, while simultaneously balancing the risk faced by the insurer. As such, plans may not fully meet the needs of individual clients. That is where riders come in. Simply put, a rider is an amendment or modification you can apply to your health insurance policy, usually at an additional cost, that offers additional coverage.
In Hong Kong some of the most popular riders requested include pre-existing riders (which extend coverage for pre-existing conditions, which are usually not excluded by health insurance plans) and maternity riders (which cover the costs of giving birth in Hong Kong).
The key here is that riders do not come free, you will pay a higher premium to add the extra coverage to your plan. Exactly how much extra will depend on the level of risk of the coverage you are asking for.
Underwriting is the process where an insurer will review an applicant’s health and medical information in an attempt to determine if they will extend coverage to that person, and if there are any coverage exclusions that will be attached. During this process the final premium will also be set.
A provider network, also commonly referred to as a Direct Billing network in some countries, is a network of health care providers who have agreed to accept payment directly from the health insurer. In other words, when you go to receive care from one of these providers, they will bill the provider first. With robust plans this means you will not have to pay out-of-pocket for care and then submit a claim.
Provider networks have become an important part of any health insurance scheme, as this could determine where you receive care. Some health insurance providers are quite strict with their network, meaning that if you receive care from a provider who is not part of your insurer’s network (out of network) they may refuse to accept the claim, or may only reimburse a certain percentage.
Therefore a health insurance provider with a wider network or with more agreeable out of network coverage stipulations is often preferred by many expats, especially those who travel regularly.
Exclusion and moratorium
Finally, these two terms are often closely linked. An exclusion is any medical care that the health insurance provider will not provide coverage for. There are a number of exclusions that all providers will include in the majority of plans they offer. For example, pre-existing conditions and any care stemming from alcohol or drug addiction. It is important to thoroughly review any plan documentation to learn what conditions are excluded.
Other plans, after underwriting, may have a moratorium attached to certain existing medical conditions. A moratorium, commonly called a ‘waiting period’ is a set period of time where you can’t submit a claim for a specific medical condition. These will usually vary by plan and coverage element. For example, some plans will attach a waiting period of 12-24 months for maternity coverage. This means that you will have to wait for 12-24 months before you can submit a claim for maternity.
It is, therefore, important to be aware of any moratoriums or waiting periods attached to plans as they are becoming increasingly popular for high-cost medical care.
While there is a lot to consider when looking for health insurance coverage, there are plans out there with excellent coverage elements and agreeable terms, the most popular being international health insurance plans. To learn more about your health insurance options, contact the experts at Pacific Prime today.
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