5 things to consider when choosing a Health Insurance plan

There is a lot going on in the world right now, which makes planning for the future pretty tough. Many people are considering their long-term options for their employment and family, and may even be actively considering relocation away from Hong Kong.

With this in mind, it is important to understand that any health insurance choices you make today could have an impact on your ability to effectively utilize the coverage offered under the policy. As such, here are our top 5 pieces of advice to consider when choosing a health insurance product.

1. Coverage Areas

The geographical coverage area on a health insurance policy is going to be a critical component of your plan in this day and age.

There are two different types of health insurance available in Hong Kong; locally underwritten Hong Kong health insurance products, and international health insurance policies. Both of these plans operate in much the same way (i.e. they protect you from the costs associated with your private medical treatment), but do have some critical differences.

The first, and possibly the most important, difference is with regards to where your health insurance policy is able to protect you. For a majority of Hong Kong health insurance plans you are unable to receive any protection under the policy when you are physically outside of Hong Kong. This means that for many people with locally underwritten Hong Kong health insurance plans they would have to purchase supplemental travel insurance each time they go overseas – and travel insurance generally has far less medical protection than a traditional health insurance policy.

International health insurance plans, on the other hand, actually give you a choice of coverage areas. With options generally including coverage areas for Worldwide, Worldwide Excluding the USA or North America, and Regional cover including Asia-only or South-East Asia only. While more comprehensive coverage areas (like choosing worldwide vs worldwide excluding the USA) are more expensive from a premium standpoint, having protection against your medical costs anywhere on earth gives you extreme flexibility and utility from your health insurance.

A plan’s coverage area will have a direct impact on where you are able to receive coverage from the insurance, which doctors and hospitals you are able to visit, and even if you have to purchase additional insurance cover to bridge any gaps. Ultimately all these variables will have an impact on your finances and the amount that you will be paying for the insurance, so understanding your options and making a smart decision for your health insurance coverage area based on your future plans will be absolutely critical at this time.

2. Portability and Continuation

Tying into the point of considering coverage areas is the idea of health insurance portability and continuation.

Under some international health insurance products, the policyholder is offered the ability to take their plan with them if they should ever relocate. This is called “portability” the ability to carry your plan from country to country around the world. The local laws and insurance regulations in the destination country will determine whether the health insurance is able to provide coverage at your final location. However, in many cases (moving from Hong Kong to Singapore, for instance) your plan may actually be able to provide uninterrupted medical and healthcare protection to you and your loved ones should you need to relocate.

This is obviously important in an environment where uncertainty is ever present, and having the guarantee of continued medical protection no matter where you go is invaluable. Portability is directly tied to a policy’s geographical coverage area, and a plan cannot be taken outside of its defined area of coverage. So, selecting an appropriate coverage area and ensuring you are choosing to purchase a policy with portability will maximize your ability to make the most out of the plan no matter what happens.

Continuation is similar to portability but occurs on group and corporate health insurance plans. Continuation is the ability for an individual to continue coverage on a personal basis after they have left the group.

3. Pre-existing Conditions

Unfortunately, one of the biggest concerns in relation to health insurance is the issue of pre-existing medical conditions. A pre-existing medical condition is typically defined as “any medical treatment for which the policyholder has been diagnosed, received treatment, displayed symptoms, or otherwise been aware of prior to the commencement of the insurance.”

Most health insurance products will simply exclude pre-existing medical conditions from coverage; meaning that the policyholder cannot claim for treatment of the condition or related conditions under the plan. However, there are some plans which will offer pre-existing condition coverage through specific policy mechanisms.

The first of these is “Coverage with a moratorium.” Under a moratorium, if the policyholder does not require treatment, displays no symptoms, and receives no medication, then after a specific length of time the insurance may consider covering the pre-existing condition under the plan.

The second common way to cover a pre-existing medical condition is through the payment of a higher premium. In exchange for more expensive insurance coverage, the insurer may elect to include the pre-existing condition in the plan’s coverage.

Existing medical conditions are going to be the biggest hinderance to making the most of your health insurance policy, and should you need to apply for a new policy in the future then any medical conditions you have presently will likely be excluded.

As such, look to purchase a health insurance policy that will last you for as long as you need it; by ensuring that you have a portable plan with a large coverage area, you will not need to purchase any additional health insurance protection in the future and will not have any conditions excluded on the basis of being pre-existing.

4. Waiting Periods

There are many health insurance benefits that come attached to a waiting period. Maternity, Dental, and Psychiatric are just some of the examples.

If a health insurance benefit is attached to a waiting period then the benefit is not covered under the insurance policy until the waiting period is completed. In the case of maternity insurance, the waiting period is normally in the duration of 12 to 24 months from the start of the policy. As such, from the minute the policy is activated, the policyholder must wait a minimum of 12 months (depending on the policy they have purchased) before receiving coverage for costs related to maternity treatment under the plan.

This is another area in which continuity of coverage is important. Being able to maintain a single health insurance policy for an extended period of time means that waiting periods will have been completed and not be seen again. Jumping from health insurance plan to health insurance plan means that the issue of waiting periods will be faced often; which can be frustrating if you are trying to start a family and are unable to receive maternity coverage.

Long term planning and understanding your future goals and lifestyle is critical in ensuring that a health insurance policy is able to do what you need it to do.

5. Where and How the Policy was purchased

The final consideration when purchasing a health insurance policy has less to do with the policy itself (and the coverage offered by it), but more about how you are choosing to purchase a policy. There are 3 main options to buy a health insurance plan in Hong Kong. Directly through the insurance company or underwriter, through an insurance Agent, or through an Insurance Broker.

Choosing to use an insurance agent is, essentially, the same as going directly to insurance company. This is because an agent works for the insurance company and represents their interests – not those of the policyholder. You only receive a limited range of options with regards to your coverage, all of those options being provided by the same underwriter.

A broker is an independent insurance intermediary, obligated by law to represent the interests of the policyholder (and not those of the insurer), able to work with many different insurance companies. This means that you get the widest range of choice regarding your best interests when it comes to health insurance.