So, you need to lower your health insurance premium?

With the continued presence of the Covid-19 Coronavirus in countries worldwide there is a scramble for many people to get covered by high-quality health insurance. For individuals who are currently covered, they will not want to lose their insurance protection at this time.

However, there is a problem. Full coverage, comprehensive Hong Kong and international health insurance policies can be extremely expensive; and that cost can grow if you’re attempting to insure an entire family. Businesses are facing the same problems as individuals in this regard.

How do you ensure employees have access to the highest-quality healthcare should they need it, but are still able to offer cost-effective coverage at the same time?

Tailor the policy to meet your needs

The first area of your health insurance to have an impact on the overall cost of the policy are the benefits you will be receiving. A health insurance policy which offers more benefits, and a higher level of coverage will normally be more expensive than a similar plan which offers fewer benefits and less overall protection.

For example, all health insurance options (both in Hong Kong and internationally) will start with Inpatient coverage. That is to say, health insurance, at its core, is designed to protect you against the cost of your medical treatment where an overnight stay in a hospital (or similar facility) is medically necessary.

As health insurance starts with inpatient protection, any policy benefits in addition to the basic inpatient cover will normally increase the overall cost of the policy.

So, opting to include Outpatient protection, Maternity coverage, alternative therapies, and even dental treatment under your health insurance coverage will raise the cost; significantly, if you opt to include all the available benefits.

As such, the easiest place to start with your health insurance premium reduction is by only selecting the exact benefits which you need in your policy. While a more comprehensive insurance plan is always more attractive, if you’re seeking to balance cost vs benefit then trimming the benefit fat slightly can mean the overall premium is that much lower.

Upgrades and Downgrades – what is re-underwriting?

At this point it should probably be mentioned that it is far easier to downgrade your health insurance coverage than it is to upgrade. This is for the simple reason that an increase in protection normally requires re-underwriting on the part of the insurance company towards the individual being covered – the policyholder is now presenting a bigger risk than they did prior to the upgrade and should be underwritten accordingly.

This means that the ugly specter of pre-existing medical conditions can rear its head – upon re-underwriting any medical conditions that may have been covered by the existing policy can now be excluded (as the policyholder is technically applying for new cover). Because of this, it is not advisable for a person to attempt to upgrade their plan to receive more cover once the health insurance policy has been taken out.

However, if you start with a comprehensive policy, with more coverage benefits than you think you need, downgrading your health insurance plan is actually a much easier proposition than increasing the coverage you are receiving. While changes to an existing policy are not typically advisable, it is possible for a policyholder to reduce their protection under the plan, consequently reduce their premium burden, and not change their underwriting status or deal with pre-existing medical conditions, by removing coverage from their policy.

For example, if a policyholder is concerned about the cost of their Hong Kong health insurance plan which covers both inpatient and outpatient protection, then a very simple cost reduction strategy would be to remove the plan’s outpatient protection (if possible). The policyholder is still receiving vital inpatient protection, but is not paying for the added expense of outpatient coverage.

Don’t forget the minutia

Although it is the big-ticket items, like the coverage that you will actually be receiving under the plan, which get all the attention, there are myriad ways that you can impact your premium. Most of the Hong Kong health insurance and international health insurance products offered by CCW Global offers you abundant choice to control every facet and aspect of your coverage – even if you have an existing health insurance plan and are looking for a new option.

The cost difference between locally underwritten Hong Kong Health Insurance products and their International health insurance counterparts are stark, but many policyholders are not looking at where or how their insurance is underwritten. The choice matters, more than you may think, but is often overlooked as part of the cost of a plan and how the different style of health insurance factor into your premium.

Outside of which insurer is providing the health insurance plan, and where they’re located, most of the choices you make in apply for and setting up the policy will ultimately have an impact on how much you pay. It really all comes back to the definition of insurance, i.e; the equitable exchange of risk for a predetermined fee. All the choices you make in lowering your risk (that is to say, the risk of the insurer paying for your healthcare) have an impact in reducing the cost of your coverage.

As an example, having a policy with a worldwide, or international coverage area means that the insurer is potentially exposed to medical costs you claim for anywhere on earth. This includes countries where the healthcare costs are extremely expensive, like the USA. Consequently, worldwide health insurance products are normally far more expensive than those which limit the insurer’s exposure to a single country or region.

Similarly to this is your choice of accommodation, should you be admitted to a hospital. While it may not be very comfortable sharing a ward with 8 other people, selecting lower class rooms for coverage under your plan will substantially influence the costs of your insurance. In Hong Kong this is especially important, as your room class dictates all subsequent costs when receiving care. Individuals in private rooms at private hospitals, like the Adventist, pay more for the same treatment as someone who is staying in a ward or semi-private room.

Additional, often overlooked, aspects of the health insurance plan which could impact your premium may be something as simple as how you’re paying and in what frequency. Many insurers will place a surcharge on credit card payments, so you could be paying more than you need to – especially if you are paying monthly by credit card. Annual wire transfer or cheque payments generally get the most bang for their buck, without any surcharges.

Finally, you should also be considering your own contribution towards the cost of your healthcare, outside of the premium you paid for you insurance. We recently talked about the power of deductibles, copays, coinsurance, and excesses in hacking your health insurance premium, and this cannot be underestimated.

The cheapest possible form of Hong Kong Insurance is inpatient-only, with an extremely high deductible, and a ward accommodation benefit. This is because the chance of the insurer needing to settle a claim on the policy is very low, and will only happen after the policyholder has satisfied their deductible burden, and is contained to a single location (Hong Kong). One of the most expensive health insurance options would be an international health insurance policy with worldwide coverage, no deductible, and full coverage of all possible benefits.

If you are concerned about the costs of your health insurance protection, but do not want to run the risk of losing cover in the midst of the biggest global health crisis of the last 100 years, there are options for you. From the smallest part of the policy, to the most obvious, you have the control you need to maximize the coverage you receive while minimizing your financial burden for the insurance.