Hong Kong health chief Sophia Chan defends insurance scheme despite critics saying tax breaks are too small
Long-awaited voluntary scheme will improve the standard of medical insurance packages in the market by offering attractive terms, Chan says
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Under the scheme, the premium for medical insurance was expected to be around HK$4,800 on average, with each taxpayer estimated to get an HK$800 per person tax cut if they joined.
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If a policyholder paid HK$8,000 a year in premiums – the tax deduction ceiling proposed in the budget – the highest tax rebate they could enjoy would be HK$1,360 per insured person.
Those who earned less or bought cheaper policies would have rebates amounting to just a few dozens dollars – leading to doubts as to whether the incentive was enough to encourage people, especially the young, to take out medical insurance.
But Secretary for Food and Health Sophia Chan Siu-chee said the long-awaited scheme would improve the standard of medical insurance packages in the market by offering attractive terms.
The scheme covers policyholders who can use private medical services until they are 100 years old, including surgical procedures, imaging tests, non-surgical cancer treatment and mental health therapy. It will also provide a 21-day cooling-off period, with more transparent premiums.
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Currently, no health insurance package in the city offered such a high level of guarantees, according to the Food and Health Bureau, which expected insurers to take six to nine months to bring their products up to standard for the scheme after the Legislative Council approved it.
“The tax break is not the only incentive to join since it is a voluntary scheme,” Chan said on Thursday.
“But we hope it can attract people by giving them another choice, which offers additional terms that existing packages do not cover.”
The purpose of the scheme is to encourage people to buy insurance and use private health care services, easing the burden on the overloaded public system which cared for 90 per cent of inpatients.
The bureau expects 1.5 million people will join the Voluntary Health Insurance Scheme in the first three years, and 1 million of them will benefit from the tax deduction arrangement. The lost government revenue would be HK$800 million a year.
“The estimated number of people taking up the scheme is very conservative as currently there are about 2 million Hongkongers with private insurance packages,” Chan said.
She said public hospitals would continue to treat serious and emergency conditions, as well as low-income patients who cannot afford private insurance.
But lawmaker Dr Kwok Ka-ki believed the deductable amount was too low to cover expensive treatment such as cancer care, citing the example of targeted therapy which could cost up to HK$100,000 a month.
“Also, since the government did not give any restrictions on the price of insurance packages, the insurers could simply raise the premium and benefit from the scheme,” Kwok said.