Dialogue with Wang Shun, the person in charge of ZhongAn Health Insurance products: Seeking the boundary of the "impossible triangle" for coverage of those with pre-existing conditions

Domestic commercial health insurance is entering an exceptionally critical deep water zone. According to the latest industry statistics, the population of individuals with pre-existing conditions and sub-healthy individuals in China has exceeded 400 million, with chronic disease patients making up the vast majority. As the aging population curve continues to rise, the real medical payment needs of this large group are experiencing exponential growth; However, the long-standing reality is that these 400 million people are often ruthlessly filtered out by the "funnel" of mainstream commercial health insurance due to stringent health disclosure thresholds. Over the past decade, relying on the demographic dividend of young and healthy populations, critical illness insurance and million medical insurance have seen explosive growth. But today, the penetration rate of healthy populations is nearing its ceiling, the industry's premium growth rate is slowing down, and the market has completely entered a highly competitive phase of stock game. As finding incremental growth becomes a must-answer question for all insurance companies, the population with pre-existing conditions, once regarded as "high risk and difficult to price," has naturally been pushed to the center stage. The shift in focus is driven not only by the market's self-exploration but also by clear top-down policy guidance: the 2026 government work report explicitly proposed "accelerating the development of commercial health insurance," and in the previous central financial work conference, "inclusive finance" was officially included as one of the "five major articles" that the financial industry must do well. At the same time, the underlying reconstruction of the medical payment environment has pressed the accelerator for the transformation of commercial health insurance. In recent years, the reform of medical insurance payment methods has continued to deepen, with DRG (Diagnosis-Related Groups) and DIP (Disease-Based Payment) being comprehensively implemented in public hospitals across the country. Under cost control constraints, hospitals tend to discharge patients who meet the clinical cure criteria for acute phases as early as possible to manage the average medical costs of a single disease. The change in payment mechanisms has reshaped patients' medical pathways, with many patients in postoperative recovery or stable severe conditions facing real pressure to transition from public hospitals to rehabilitation institutions or home care. All of the above provides a clear entry point for commercial health insurance to intervene in full-course management and fill payment gaps, officially bringing health protection for individuals with pre-existing conditions to the core proposition of policy and market. However, on the operational level, advancing insurance for individuals with pre-existing conditions is by no means an easy task. In recent years, although some non-standard body insurance targeting specific chronic diseases or relaxing underwriting conditions have emerged in the market, and various local "benefit insurance" initiatives have significantly lowered the insurance threshold; From the perspective of actual operational effectiveness, most products still remain at a superficial level of "can be insured," with high deductibles and stringent claims conditions, leaving a significant gap from the "good compensation" that patients truly need. Against this backdrop, on March 12, ZhongAn Insurance officially launched "ZhongMinBao·High-End Medical Insurance 2026," which for the first time includes hospitalization rehabilitation costs for 16 specific diseases within the coverage scope, implements a zero deductible, and supports direct payment within the network of cooperating hospitals; This upgraded product directly addresses three major high-frequency pain points for individuals with pre-existing conditions in real medical scenarios: small hospitalizations, postoperative rehabilitation, and chronic disease medication. From the publicly available coverage terms, ZhongAn attempts to fill the current market's protection gaps and achieve a substantial leap from simple financial compensation to refined medical services What practical samples does this business exploration in the deep water zone provide for the entire health insurance industry? In a dialogue with Wang Shun, the head of health insurance products at ZhongAn Insurance, we discuss the actuarial logic behind product iteration, the trial of the HMO (Health Maintenance Organization) model in the rehabilitation medical field, and the future evolution direction of commercial health insurance. Actuarial Logic: Finding the Balance Point of the "Impossible Triangle" Wall Street Journal: Zhongminbao's mid-to-high-end medical insurance focuses on no occupational restrictions and insuring those with pre-existing conditions. However, in the traditional pricing logic of health insurance, "broad coverage, high protection, and low premiums" are often seen as the "impossible triangle" that is difficult to reconcile. How should ZhongAn balance this contradiction in the underlying actuarial logic and data model during the upgrade to the 2026 version? Wang Shun: At this stage, the biggest pain point for commercial medical insurance when dealing with insured individuals with pre-existing conditions is the lack of sufficiently long-term, large-scale reliable experience data. Traditional actuarial models mostly rely on static morbidity tables of healthy populations, and directly applying them to sick individuals can easily lead to significant claims deviations. The "impossible triangle" is a static model preset in actuarial science, but insurance products require a process of continuous exploration, verification, and refinement in real operations with a large user base. Over the past three years, Zhongminbao has accumulated a vast and solid amount of claims experience data through actual operations. By analyzing these real medical behaviors, we found parts that align with product design expectations, but also exposed some long-tail risks and adverse selection deviations that exceeded expectations. The essence of commercial insurance is mutual assistance; if we allow a few short-term arbitrage behaviors to develop, it will ultimately harm the long-term interests of the vast majority of customers. Therefore, the iteration of Zhongminbao's mid-to-high-end 2026 did not blindly pursue scale expansion but adopted a more restrained and refined actuarial strategy. The upgrade not only expanded advantageous protections but also added highly targeted risk prevention restrictive clauses. Through this refined adjustment, we ensure horizontal fairness and vertical sustainability of product rates, thus providing a stable protection system for long-term customers that can withstand cycles. Wall Street Journal: What specific risk control details reflect this "restrictive adjustment"? Wang Shun: For example, we have included high-risk conditions such as level 4 and above nodules and pulmonary nodules larger than 8 mm as exclusions; We have extended the waiting period for general pre-existing conditions, and for typical elective surgery diseases such as stones, polyps, and benign tumors, we have reduced the first-year claims ratio for new policyholders. Wall Street Journal: What is the reason or basis for actively making these "subtractions"? Wang Shun: When we find that the original design is detrimental to the interests of the vast majority of customers, we will correct it in the iteration. From clinical medical data, the probability of pulmonary nodules converting to malignant tumors and incurring high surgical costs in the short term is very high. Including them in the coverage would constitute serious adverse selection, thereby increasing the underwriting costs of the overall fund pool; Extending the waiting period for general pre-existing conditions is also because, in actual claims, we have indeed observed that many users, after passing a very short waiting period with pre-existing conditions, immediately go to the hospital for non-emergency surgeries such as gallbladder removal or polyp removal After squeezing out the excess, we have redistributed the saved compensation resources to loyal customers pursuing long-term health protection . Wall Street Insights: Please elaborate on the "addition" part of this new product, for example, what upgrades and innovations are there in high-frequency medical scenarios? Wang Shun: We have substantially increased the reimbursement ratio for general medical (non-critical illness) claims in the range of 0 to 20,000 yuan from 50% to 60%. In previous million-dollar medical insurance plans, due to the common existence of deductibles of 10,000 yuan or even higher, a large number of small hospitalization expenses could not be reimbursed. By increasing the reimbursement ratio for low deductible ranges, we have directly and significantly enhanced the actual claim amount for patients. In addition, one of the heaviest long-term economic burdens for patients with chronic diseases is the cost of medication. Zhongmin Insurance's high-end 2026 plan has upgraded the responsibility for imported original drugs for chronic diseases to a mandatory coverage, providing an exclusive annual limit of 5,000 yuan, with a reimbursement ratio of 60% and supporting a zero deductible. We have benchmarked the drug pricing of mainstream e-commerce platforms, combined with online consultations and home delivery services, effectively lowering the threshold for patients to access high-cost performance original drugs. Rehabilitation Breakthrough: Restructuring the HMO Cost Control Loop under the DRG Model Wall Street Insights: We can see that the most groundbreaking action in this product upgrade is the inclusion of the rehabilitation phase into the high-coverage protection system for the first time, with reimbursement ratios for specific diseases reaching 100%. In the past commercial medical insurance market, rehabilitation medical care has always been a "forbidden zone" that is difficult to touch. Including high-cost rehabilitation phases into the protection system poses a huge challenge to the cost control capabilities of insurance companies. As the product responsibility person, how do you view the role of insurance companies in the entire medical rehabilitation process? Wang Shun: The inclusion of rehabilitation responsibility is a direct response to the current transformation of the medical payment system. By 2026, the DRG (Diagnosis-Related Group) payment reform will be fully implemented in public hospitals nationwide. Under the current DRG operating mechanism, hospitals tend to discharge patients who meet the clinical cure conditions for acute phases as early as possible to control the average cost per disease. However, this does not signify the end of treatment. Taking stroke as an example, the six months after a patient is discharged from the acute phase is the golden rehabilitation period for neurological function recovery. Deep and professional rehabilitation intervention is crucial for the patient's future quality of life. The reason why previous commercial medical insurance rarely covered rehabilitation lies in the highly non-standard nature of rehabilitation medical services, which lack strict standardized management norms and clear treatment cessation points. We did not choose to broadly open up but instead precisely selected specific critical illnesses such as stroke and cancer that indeed have strong rehabilitation needs and relatively clear clinical pathways, providing them with coverage services of up to 1 million yuan and reimbursement of up to 100%. Wall Street Insights: In practice, how does ZhongAn select and integrate external medical institutions to ensure service implementation? Wang Shun: In terms of specific implementation mechanisms, we are exploring a deep cooperation model similar to HMO. We have selected 33 core hospitals under two leading rehabilitation medical groups nationwide for point-to-point direct connection. Unlike traditional medical insurance, which only provides "post-reimbursement" and has no intervention capability in the medical process, we will intervene in advance before patients are admitted. By collaborating with the professional medical teams of rehabilitation hospitals, insurance companies jointly participate in formulating standardized and integrated rehabilitation plans, establishing continuous monitoring and comparison mechanisms in specific disease examinations, medication, physical therapy, and other aspects. Deep intervention greatly enhances the insurance companies' control over the medical process and overall costs, and the closed-loop service experience allows patients to benefit tangibly. In the directly connected rehabilitation hospitals, patients can enjoy direct payment services upon discharge without having to advance large sums of money, making rehabilitation treatment smoother. Industry Outlook: Transitioning from Payment Tools to Medical Service Entry Points Wall Street Insights: We noticed that this product includes a special medical booster package, with a coverage amount of three million and a deductible of twenty thousand, with a 50% reimbursement ratio for certain specific diseases. Could you break down how the zero deductible of Zhongmin Insurance's mid-to-high-end medical insurance connects with the twenty thousand deductible of the special package when actual claims occur? Wang Shun: The underlying logic of the special booster package design is mainly to provide consumers with multi-layered medical choice rights. The medical expenses in the special departments of public hospitals in our country are usually several times higher than those in ordinary departments and are generally not covered by medical insurance. In terms of product liability: If a customer suffers from a critical illness, the main insurance can enjoy a zero deductible and go directly to the special department for treatment, maximizing the convenience for critically ill patients to access top medical resources. If it is an ordinary illness, and the customer purchases the booster package to go to the special department, they will need to bear a twenty thousand deductible, with 100% reimbursement for amounts exceeding twenty thousand. If they do not go to the special department, they will normally enjoy the main insurance benefits of 60% reimbursement for amounts from zero to twenty thousand and 100% reimbursement for amounts exceeding twenty thousand. Through the leverage adjustment of deductibles and tiered reimbursement ratios, the product meets differentiated and high-end medical needs while effectively preventing the moral hazard of mild patients abusing special resources. Wall Street Insights: How do you view the trend and future of the evolution of commercial health insurance? Wang Shun: Overall, the shift from a passive financial payer to an active medical service entry point is an irreversible trend in domestic commercial health insurance. With the aging population and the normalization of medical insurance cost control, the core value of medical insurance is no longer merely a probability gamble on actuarial charts, but should serve as a solid link, efficiently connecting patients with high-quality, preferred medical service resources through the financial payment mechanism of insurance. Although the entire industry has reached a high consensus on this evolutionary direction, under the current medical system background, each insurance company is still struggling to find a breakthrough path and a profitable business model. In the future, ZhongAn will continue to rely on the underlying data accumulation brought by its large-scale base, leverage its agile iteration advantages, and gradually improve the integrated health service closed loop from in-hospital treatment to out-of-hospital rehabilitation, from special medical treatment to chronic disease medication Only by truly delving into the intricacies of the healthcare industry can commercial health insurance find new growth points in the era of stock