The Voluntary Health Insurance Scam – sorry, Scheme

April 04, 2019 19:47
The Secretary for Food and Health, Professor Sophia Chan, launches the  Voluntary Health Insurance Scheme. The government expects some 1.5 million people will sign up for the new insurance plans over the next three years. Photo: ISD

Here we go again: another scheme that’s designed to strike a compromise between the interests of citizens and that of big business, and has ended up producing a limp excuse for a health insurance scheme that it is doomed to fail.

The scheme rejoices in the name of the Voluntary Health Insurance Scheme (VHIS). It has been a decade in the making and rose from the ashes of the stillborn compulsory health insurance scheme that was thwarted by the big insurance companies.

After interminable negotiations with these companies, the government finally came up with something that is highly unlikely to achieve its objective of alleviating pressure on the public health system which is groaning under demand that cannot be adequately met by the resources at hand.

The government claims that some 1.5 million people will sign up for the new insurance plans over the next three years, with a consequent exodus from the public health system. However, in bending over backwards to accommodate the voracious demands of the insurance companies, this scheme turns out to be neither fish nor fowl.

Despite claims of clarity and transparency in its implementation, the information provided on the official VHIS website is extremely user-unfriendly but some things are clear. First up is the simple fact that despite 25 companies having been signed up to provide policies, they are all remarkably similar. This raises the question of why, given so little competition, the government itself did not become the provider. Having a number of companies who are all basically offering the same things creates an illusion of choice without substance.

Now we come to the real crux of the matter, which is that at the bottom end of the scheme, where there is real scope for luring people away from the public sector. The government claims that the cost of a basic package will average out at around HK$4,000 per year. However, the benefits are so derisory as to be likely to persuade most public health patients to stay where they are.

Here are some random examples why this is so: mental health problems, which tend to be long term, are subject to a benefits cap of HK$30,000 per year. Not only would this be hardly enough to pay for private sector medication but would barely cover doctors’ fees, in-house treatment, etc. Talking of doctors’ fees, the annual cap – yes, you read that right – the annual cap on specialist doctor fees is less than HK$1,400, which will probably not even cover a single consultation. Bearing in mind that most conditions, but almost all serious ones, require the services of a specialist, this amounts to just above zero coverage.

Then there is the really expensive business of hospitalization. Again, at the bottom end of the scale, a daily maximum of HK$550 is allowed for bed and board – in private hospitals that just about covers the use of bedpans.

So standard policy holders will quickly discover that their insurance covers very little indeed and once they are in the private medical system the additional costs will rapidly mount. The net result being that even if they tip their toes into this scheme, most people will rapidly scuttle back to the public health care system.

However, this so-called average HK$4,000 premium is itself highly misleading because the people most likely to need private health care are not the young but the elderly who won’t be able to get a premium for anything like this amount. Indeed, for any realistic level of cover, they will need to pay at least ten times this mythical HK$4,000.

Little wonder then that within a day of the scheme being launched on April 1, April Fools' Day, the government was forced to admit that the benefits regime would need to be reviewed. How long that will take is anyone’s guess.

Meanwhile, let’s see how long it takes before there is some sort of admission of failure. Judging by the government’s record in these matters, it will take a very long time even assuming that mistakes are ever admitted. Take the example of the recently launched annuity scheme for elderly citizens that attracted a derisory number of applicants once it became clear that this kind of self-financed pension was about as attractive as an invitation to have dinner with CY Leung. The targets for joining the scheme were rapidly forgotten.

This looks suspiciously like the targets for usage of the Bridge to Nowhere, a.k.a. the Zhuhai-Macau-Hong Kong Bridge, which is generating a fraction of predicted traffic and practically zero commercial traffic, which was given as the original rationale for building the wretched bridge in the first place.

It’s early days, say government spokespeople trying to put a brave face on their failure.

The health scheme is way more important because it affects everyone but, lamentably, not in a good way. Why is the government doing this? The only possible explanation is that it wants to be seen doing something about the health care crisis but lacks the courage to do something with a reasonable chance of working.

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Hong Kong-based journalist, broadcaster and book author. His latest book, Defying the Dragon – Hong Kong and the world’s largest dictatorship, will be published by Hurst Publishers in early 2021.