What is the Voluntary Health Insurance Scheme, otherwise known as VHIS? As per the official statement, VHIS is a policy initiative implemented by the food and health bureau in Hong Kong to regulate individual indemnity hospital insurance products. Participation is voluntary, for both insurance companies and members of the public. The primary goals are to enhance the protection level of hospital insurance products; to provide the public with the additional choice of using private healthcare services; and, as a long-term goal, to decrease the pressure on the public healthcare system.Why is VHIS needed? As the population of Hong Kong ages, there is a rising demand for quality healthcare, which has resulted in escalating medical costs. Public healthcare spending has increased from $32 billion in 2007 to $52 billion in 2014. In Hong Kong, the public and private sectors have worked in tandem with each other as a well-established dual healthcare system. However, there is an increasing imbalance between the two, since public hospitals currently deal with more than 88 percent of in-patient cases.
With such huge strain on the public healthcare system, quality of care provided will inevitably suffer. To try to prevent this, the government proposed the VHIS as a means to balance out the workloads of both the public and private sectors. The scheme is intended to encourage the more well-off citizens to utilise private services. As an incentive, so that more people use the VHIS, the government is planning to introduce a new tax deduction. Once the amendment bill has been approved by the government and the scheme goes live, there will be an announcement on the official VHIS website. The VHIS is not intended as a one-stop solution to all the existing problems but is instead just one of the measures to try to resolve the current situation. Recent reports also suggest that the VHIS will encourage the growth of medical insurance. This in turn will provide a greater selection of health insurance products whilst keeping the prices competitive for the consumers.
Currently, there are only two insurance plans eligible for the VHIS scheme: the standard plan, which consists of standardised basic insurance coverage in accordance with the minimum requirements of VHIS, and the flexi plan, which offers enhanced medical coverage, such as higher benefit amounts and a better variety of treatments.
The benefits and rules of these policies are outlined below.
1. Guaranteed policy renewal up to the age of 100 – although bear in mind this doesn’t mean that the premiums will remain the same.
2. No ‘lifetime benefit limit’, which means that if the medical condition is coverable under the policy, there is no monetary limit for the lifetime of your policy as long as the treatment is medically appropriate and necessary.
3. A 21-day a cooling-off period, which means that if you change your mind within 21 days of purchasing the policy, you have the right to cancel and get a full refund of the premium paid.
4. It is a general rule that pre-existing conditions – even those unknown to applicants at the time the policy is taken out – are excluded from benefit coverage. Certified plans can provide partial coverage during a waiting period of three years after policy inception, meaning you while are not entitled to any of claim amount in the first year, this will increase to full coverage from the fourth year onwards.
5. Diagnostic tests and treatments of congenital conditions which started to manifest or have been diagnosed by a medical professional after the age of eight follow the same principle as undiagnosed pre-existing conditions – see above.
6. Day case procedures – surgical diagnostic procedures (including but not limited to endoscopy and colonoscopy) that don’t take place at your local government hospital are coverable under the VHIS policies. Please be aware that you will need to check the definition of a ‘day case procedure’ on your policy schedule as this will depend on how long you remained at the medical facility. You should also keep in mind that the length of stay has to be medically necessary. In other words, if the diagnostic procedure takes 10 minutes and you remain at the facility for 10 hours without a valid medical reason, the insurance is unlikely pay out.
7. Prescribed advanced non-surgical diagnostic imaging tests such as CT, MRI and PET scans that are not conducted in a hospital are coverable under the certified policies. As a general rule, these tests are subject to 30 percent co-insurance.
8. Prescribed non-surgical cancer treatments such as radiotherapy, chemotherapy, targeted therapy, immunotherapy and hormonal therapy are eligible for insurance coverage.
9. Policies also provide cover for in-patient psychiatric treatment at your local hospital.
The premiums for certified insurance plans usually differ depending on the age, gender and medical history of the applicant. These premiums can also be affected by inflation and benefit amendment. Insurance companies will need to publish the schedule of their premiums and show age-related price bands. This increases market transparency and promotes competition amongst insurance providers.
Insurance companies can decide how (or even if) to accept the application. They have the following options:
• Unconditionally; that is, with no additional exclusions or increased insurance premium.
• With premium loading; meaning you will be accepted but will have to pay a higher premium.
• Case-based exclusions; this means there will be specific exclusion written into the policy.
• Rejected application; no insurance cover at all.
Insurance companies should provide an explanation regarding the underwriting decisions to the applicants (either verbally or in writing) if requested.
Insured persons are allowed to submit a claim for reimbursement of their medical expenses incurred in both private and public medical facilities. The purchase of either of these plans will not invalidate their entitlement to use the public healthcare system.
Customers can buy certified plans through insurance companies which have registered with VHIS. The list of participating companies will be published and kept up-to-date on the VHIS website. Following their registration with VHIS, insurance companies will be required to provide their existing policy holders with an option to switch to certified plans.