President, the Food and Health Bureau has put forward a new proposal on the voluntary health protection scheme and will conduct a public consultation on the specific contents soon. The insurance sector has met with the Bureau recently to discuss health protection issues again. The Bureau indicated that it would not amend the proposed contents, and was only willing to incorporate some viewpoints of the insurance sector in the consultation paper. The insurance sector still thinks that the Government’s proposed contents are rife with problems and it is hard for it to accept them at the present stage.
The difference in views between the Food and Health Bureau and the insurance sector is evident. We further consider that the Bureau’s proposal is rife with many obvious problems. The sector cannot accept the Bureau’s explanation. First, as the coverage of the standard health insurance plans put forward by the Bureau is deeper and broader than those generally available on the market, the standard premium will definitely be higher than those on the market now. The consultant commissioned by the Government thinks that the premium will only be 10% higher, but the sector questions the authenticity and credibility of this assumption and requests the Government to give an account of its calculation method.
However, the consultant makes many assumptions in the actuarial valuation. As each company has different operation cost and the market price also involves many different factors, hence it is impossible to make an accurate calculation a few years in advance. Moreover, from the perspective of the cost alone, it is hardly convincing that with the coverage being deeper and broader, the premium will only be increased 10%.
To be honest, we are by no means over-worried because when the scheme is launched onto the market, if the increase of premium is over 10%, the public will only think that the insurance companies suddenly raise the premium and they will not care whether the consultant has made mistakes in calculating the premium. In the end, the insurance companies will have to bear the blame for wrongful accusation. Therefore, without a clear definition of the problem, it is hard for us to accept such a scheme.
Second, concerning the operation of high risk pool management, the sector considers it impractical to set the administrative cost, including the operation cost and commission, at 12.5% because the administration expenses and commission of the products under the current market competition amount to about 15% to 30% in total. The sector thinks that the Food and Health Bureau is trying to use administrative measures to underestimate the expenses of the high risk pool, in the hope of winning the approval of the public without bothering to find out if it is feasible for insurance companies. The insurance sector finds this level of administrative cost unacceptable and hopes that the Government will discuss with the sector again based on the real situation.
Third, one of the factors that determines whether the health protection scheme will be successful is the availability of sufficient private hospital beds. Every now and then, there are patients who complain about having difficulty in reserving hospital beds. Patients also have to wait for hospital beds to receive surgeries in private hospitals. There are about a total of 4 000 beds in all private hospitals in Hong Kong and the Government plans to provide 40% to 50% more beds in the next five to six years, with a maximum of 2 000. But even if Hong Kong has 6 000 beds, will that be sufficient to cope with the development? Are they sufficient to accommodate the patients diverted from public hospitals? I have great doubt about it.
As a matter of fact, the Government of the last term earmarked four sites for the construction of private hospitals, but only one site has been granted so far while another site has been returned to the Government for housing construction. This makes people think that the Government has no sincerity in developing private healthcare service as it still allows people flocking to public hospitals to seek healthcare services.
The biggest problem with the new health protection scheme introduced by the Government is how to set up a standard policy system. When people take out insurance in future, they must first take out the standard policy. For those who have the need, they can take out insurance products which provide top-up benefits but products with less coverage and lower premium are no longer available in the market. This will stifle the private market which originally had a diversified development.
At the same time, the Government has taken away much essence from the original health protection scheme, making the new scheme less appealing. For example, it no longer urges private hospital to offer service packages. Besides, the original sum of $50 billion earmarked for the implementation of the scheme, and the measures such as setting up a high risk pool, provision of premium discount for new subscribers and subsidy for savings for health protection premium have not been brought up again. Only the incentive of tax deduction remains while all other concessions have been cancelled. In other words, the estimated expenses earmarked has been reduced to less than $5 billion, a reduction of 90%, which means the scheme has lost 90% of the appeal. Consequently, with the lack of support from the insurance sector and interest of the public, the scheme will not even be passed by the Legislative Council in the end. What is the meaning of introducing such a scheme then? I hope that the Food and Health Bureau will think twice. Thank you, President.