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LCQ7: Medical insurance

    Following is a question by the Dr Hon Kwok Ka-ki and a written reply by the Secretary for Health, Welfare and Food, Dr York Chow, in the Legislative Council today (November 9):


     It has been reported that there were cases in which existing local medical insurance providers were selective in accepting applications for insurance covers; and there are also complaints against insurance companies which set discriminatory terms and conditions in their medical insurance policies, and refuse to provide insurance covers for psychiatric patients and the chronically ill. In this connection, will the Government inform this Council:

(a) of the number of insurance companies in Hong Kong which specialise in medical insurance and critical illness insurance at present, the coverage of the insurance policies concerned and the illnesses and medical services which fall outside such coverage; and the number of such companies which offer comprehensive medical insurance and accept applications for covers for all types of illnesses without setting any restrictive terms;

(b) of the statistics on the risk assessment of medical insurance, including the number of psychiatric patients and the chronically ill admitted by public hospitals over the past three years, the average health care cost and amount of public funding involved, and the estimated expenses that might have incurred if such patients had received treatments in private hospitals; and

(c) whether it will consider reviewing and enhancing the regulation of medical insurance coverage in order to recommend insurance scheme choices to the public more specifically when proposing practicable options for financing health care in future, so that the public may enjoy medical protection?


Madam President,

(a) "Medical insurance" and "critical illness insurance" are two different types of insurance. The former generally refers to insurance that provides medical cost coverage to an insured in the event of his illness while with the latter, an insured will be offered a fixed sum of compensation when confirmed to have contracted any specified serious illness. In Hong Kong, medical insurance is normally sold by insurers carrying on general insurance business under a stand-alone policy, or offered by insurers carrying on long term business (i.e. life insurance) in the form of a rider to a life insurance policy. Most of the critical illness insurances are sold by way of adding a rider as mentioned above by insurers carrying on long term business. Such products, however, are also sold by some of the insurers carrying on general insurance business.

     There are currently a total of 96 insurers (namely 29 long-term business insurers, 53 general business insurers and 14 composite insurers) authorised to provide critical illness insurances or medical insurances.

     Coverage of medical insurance is determined by the terms and conditions of individual insurance policies. Generally, it may cover fees for hospitalization, surgeons, anaesthetists and operation rooms, etc. For critical illness insurance, it normally restricts cover to about 30 to 40 types of serious illness, including fatal illnesses such as cancer, heart attack (myocardial infarction) and end stage renal failure.

     At present, medical and critical illness insurances will generally contain a number of restrictive terms or exclusions. Common exclusions include pre-existing medical condition, congenital diseases, AIDS and engaging in dangerous activities.  Whether insurers will accept applications for insurance from people with a specific illness would depend on individual insurers' underwriting policy in respect of the relevant risks.

(b) The number of psychiatric patients admitted by public hospitals, the average cost of medical services provided to them, and the relevant total yearly expenditure by the Hospital Authority (HA) in the past three years are set out in the table.

     HA does not routinely collate statistics on the number of its chronic patients or related expenditure. Based on available data on the top 15 disease groups by principal diagnoses, it is estimated that around 200,000 chronic patients are admitted to hospitals for treatment each year. However, due to the great variety of clinical conditions and their varying complexity that may be involved in these admissions, it is not possible to estimate accurately the amount of expenditure by the HA on treating these patients or the amount of expenses that may be incurred if they were treated in private hospitals.
(c) The Health and Medical Development Advisory Committee (the Committee) published a discussion paper entitled "Building a Healthy Tomorrow" in July this year to discuss the future service delivery model for our health care system. Public consultation on the Paper just ended on October 31 and we are now collating the views collected. The Committee will proceed to the next stage and study the issue of health care financing. The role to be played by medical insurance in financing options and the availability of other supporting arrangements, etc. will be considered by the Committee.

     At present, the Commissioner of Insurance does not have the statutory power to regulate the terms or premium of insurance products (including medical insurance products). That said, if the Committee considers that the feasibility of medical insurance as a future financing option merits further study, we will certainly discuss with the relevant sectors how medical insurance can be built into the whole financing package.

Ends/Wednesday, November 9, 2005
Issued at HKT 12:41


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