Vast differences in scheme premiums

Top News | Sophie Hui 16 Jan 2020

Premiums charged by Voluntary Health Insurance Scheme standard plans differ by more than twofold for basically the same protection, the Consumer Council has found.

The voluntary scheme was fully implemented in April last year by the Food and Health Bureau to regulate indemnity hospital insurance plans offered to individuals.

The consumer watchdog reviewed all 29 standard plans and 28 "flexi plans" available on the market.

All 29 standard plans provided basic cover for policyholders, while 19 of them included other benefits such as death and hospital cash benefits and no additional premium. Although they have similar basic protection and benefit limits, their premiums greatly varied, the council said.

For instance, the highest premium plan by Liberty International for women in their 80s was HK$36,166 a year, 1.5 times higher than AXA's plan of HK$14,443 per year.

Based on the standard plans' framework, insurance companies can launch flexi plans to boost the basic benefits and benefit limits or add supplementary benefits to the basic items. But the watchdog found a substantial variation in annual compensation claims of the 28 flexi plans provided by 21 insurance companies.

The upper limits set for annual compensation claims varied from HK$420,000 to 71 times as much at HK$30 million.

Six plans have not set annual benefit limits and lifetime benefit limits, four plans have set limits on both, while the other 18 plans set annual benefit limits.

Consumers also need to pay attention to the difference in the benefit limit for nonsurgical cancer treatments, the watchdog said.

Only four plans offer full reimbursement - from AXA, Bupa, Cigna and Zurich Insurance.

AIA's plan offers an insured sum of up to HK$2 million while remaining plans set upper limits from HK$80,000 to HK$700,000.

On outpatient treatment before and after hospitalization and day surgery, three plans by AXA, AIA and Bupa offer full reimbursement while the remaining plans set limits from HK$3,000 to HK$30,000.

Council chief executive Gilly Wong Fung-han said it is difficult to standardize the premiums even if the coverage of the plans is nearly identical since Hong Kong is a free market and insurers have different business costs.

"The market in Hong Kong is special as consumers tend to be lazy," she said. "They rarely do a lot of comparison [of different insurance plans] by themselves. Most of the time, they rely on their relatives and friends who work as insurance agents, or agents introduced to them by their friends."

She said consumer education should continue as insurance agents may not explain details clearly or consumers may struggle to understand.

Nora Tam Fung-yee, head of the council's research and testing committee, said consumers should compare plans based on personal needs and affordability.

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