Hong Kong insurers’ health at risk as medical claims could double in decade

Medical claims paid by Hong Kong insurers could double within a decade, a study has warned, raising concerns over the sector’s sustainability. The findings, released on Tuesday, showed total medical claims in the city rose by more than 60 per cent between 2019 and 2023, driven largely by a surge in inpatient bills, especially for day procedures. “If such an increase continues at the same rate, it will raise serious concerns about the affordability of private health insurance for both employers and individuals, as the costs would be 50 per cent higher in five years and double within 10,” said Peter Yuen Pok-man, dean of Polytechnic University’s College of Professional and Continuing Education and who led the study. “Given the pace of the rise, the industry will not be sustainable, and therefore remedial measures must be introduced.” The research analysed more than 10 million claims in 2019 and 2023, and found total reimbursements reached HK$17.73 billion (US$3.08 billion) in 2023, up by 61 per cent from HK$10.99 billion in 2019. The increase was mainly driven by inpatient claims, which grew by 75 per cent to more than HK$14 billion, compared with a 24 per cent growth in outpatient reimbursements. While the average inpatient bill only rose by 5 per cent, the number of valid cases jumped by 68 per cent. Room and board costs grew by only 24 per cent, suggesting the surge was driven mainly by day procedures, Yuen said. For outpatient claims, general practitioner visits edged down slightly, but consultations with Chinese medicine practitioners, physiotherapists and chiropractors – which are usually more expensive – increased. In 2023, digestive system diseases were the most frequently claimed inpatient conditions, with 20,966 cases, followed by viral warts at 14,347. A large number of digestive system claims were related to gastro-colonoscopy procedures, Yuen said. He added that many of these procedures were elective and some policyholders, even those at low risk, simply choose to go through them just because they were covered by insurance. While setting a lower reimbursement limit and introducing co-payment mechanisms for these procedures could mitigate the situation, the trend would be difficult to reverse given Hong Kong’s ageing population, Yuen said. “Different stakeholders should sit down and discuss in-depth how to suppress the growth,” he said. Industry leaders warned that the increase in payouts would push up premiums for policyholders and urged them to file claims prudently. They said insurers functioned as a pool of policyholders’ funds, and when more claims were made, premiums would have to increase to cover higher costs. “The data has been shocking,” said Selina Lau Pui-ling, chief executive of the Hong Kong Federation of Insurers. “We hope to have residents make insurance claims more prudently through public education.” One of the challenges faced by the industry was an increase in claims under the government’s Voluntary Health Insurance Scheme, which must comply with the product design minimum requirements set out by the Health Bureau, according to Orchis Li Tzy-lan, deputy chairwoman of the federation’s task force on the sustainability of medical insurance. Li said such plans now covered some “elective” procedures identified by the study, but the scheme’s regulatory framework did not allow insurers to downgrade coverage, leaving them with limited room to respond to the trend. “That is why we think it is time to review the scheme’s regulatory framework with different stakeholders,” she said.