The government has unveiled plans for a voluntary private health insurance scheme expected to be operational in 2015.

Secretary for Health and Food York Chow informed the relevant Legislative Council (LegCo) panel on Monday the decision to launch a voluntary health insurance scheme following the completion of second-phase public consultation of healthcare reform.

The purpose of the scheme is to encourage those who can afford to do so to turn to the private healthcare sector, in order to ease the burden on the public sector, which is heavily subsidized, he said.

The size of the pool of insured persons will be critical.

To that end, the government has set aside HK$50 billion, creating a fund for subsidizing youth, the elderly and people suffering from chronic illness.

The Hong Kong Medical Association has declared its support for the scheme.

The government, however, should ensure adequate numbers of healthcare workers in both the private and public sectors before the insurance scheme is implemented, said the association's former president Tse Hung-hing.

If too many people with chronic illnesses participate, the pool will soon be exhausted, he noted, saying it would be unfair to use premiums paid by healthy people to subsidize those with infirmities.

The enabling legislation is to be drawn up between now and the first half of 2013. Work will begin with a draft law for regulation of insurers.

The government hopes to introduce the bill into the LegCo in 2014 and implement the scheme in 2015.

The government has discussed with the insurance companies and worked out 10 parameters for the insurers.

It will also ensure the fees for medical services, the premium rates and administration fee are reasonable so that people can know if the health insurance scheme offers value for money.

Chow also said of the 2.4 million people who have obtained health insurance, the majority are working and middle aged.

Only 4 percent of elderly people have obtained private medical insurance, but half a million people will be sufficient to sustain the new health insurance scheme.

He amplified his remarks at the conclusion of the meeting, saying that to provide better incentives for young people to join the scheme, the government may follow the example of Australia by offering greater subsidies to people who join before the age of 30.

At the panel meeting, the Democratic Party's Albert Ho questioned the justification for subsidizing people with public money to obtain health insurance.

Li Fung-ying, of the Federation of Hong Kong and Kowloon Labour Unions, expressed concern with the quality and fees of medical services and the premium rates.

Lawmaker Chan Kin-po, from the insurance constituency, dismissed criticisms that the health insurance scheme is a transfer of benefits to the insurance sector.

More than 80 percent of the money will go to hospitals/doctors while insurance companies will get no more than 5 percent of profits after defraying the cost, Chan said.

The insurers also find some of the 10 parameters rather harsh, he said.

For example, they cannot refuse people with pre-existing diseases or increase premiums for those who are infirm.

joseph@chinadailyhk.com

China Daily

(HK Edition 07/12/2011 page1)