13 Important Health Insurance Terms You Need to Know
These days, if you’d like to receive care at private hospitals or clinics in Hong Kong, you’ll require private health insurance to help offset the ever-increasing costs.
This can come as quite a shock to expats coming from countries that have public health insurance, or those moving here without company-sponsored health insurance.
The health insurance industry itself is highly complex, with tons of plans, providers, and coverage elements. Like many other industries, there are several ‘buzzwords’ used by insurance companies that can be quite confusing.
As such, this Pacific Prime Hong Kong article will uncover the 13 important health insurance terms you should be aware of if you’re considering purchasing a plan in Hong Kong.
Premium
One of the first questions insurance providers will ask regards your premium. But first, “What are health insurance premiums?” you may ask.
To put it simply, the premium is what you’ll pay for the insurance plan. In Hong Kong, most health insurance providers will quote either a yearly or semi-annual premium in either HKD or USD.
Other providers may quote a yearly premium but allow you to set payment dates. For example: pay every month, every six months, or even once a year. It’s usually up to you to select when you would like to pay.
One thing to be aware of with premiums in Hong Kong is that they are usually adjusted at the beginning of each year. If you see that your provider has increased premiums, what this means is that you will pay the higher premium when you go to renew your plan.
For example, if you sign up for health insurance coverage for 12 months, pay every month, and the insurance company increases premiums halfway through your contract, you will not have to pay the higher rate until you renew your contract at the end of 12 months.
Deductible, Copay, and Coinsurance
These are three terms that focus on the premium you’ll be paying for your health insurance plan and are often used by providers when suggesting ways to reduce or adjust your premium.
But first, what is a deductible?
The deductible on plans is the amount of money you must pay, usually on an annual basis, before health insurance will kick in. For example, if you have an annual deductible of HKD 10,000, you will need to pay this amount before your health insurance provider will allow you to submit claims.
Generally speaking, plans with higher deductibles will have lower premiums. This can be appealing to some people, especially those who are currently healthy, but this can be a risky choice for others. The key here is to find a balance between the premium and deductible that you are comfortable with.
A copay, on the other hand, is the amount you must pay each time you submit a claim after the deductible has been met. For example, if you sign up for a plan with a HKD 100 copay, you will need to pay this much each time you visit the doctor and submit a claim to insurance.
Coinsurance is quite similar to copay, but instead of a set dollar amount, it is a percentage. Some providers will use slightly different wording when it comes to coinsurance.
For example, some will refer to their plan being an 80/20 coinsurance plan. This means that for every bill, you will pay 20% of the value, while the insurer pays 80%.
As with deductibles, coinsurance and copay can be implemented into plans to reduce your premiums. However, this can be risky for some, especially if there is potential for a large number of doctor visits in a year, or if you’re on a tighter budget.
Explanation and Table of Benefits
These are two terms used to describe benefits. The table of benefits is a document insurers provide that contains an in-depth overview of the benefits covered by your plan and the ‘small print’ around the plan. It often includes information like exclusions and plan limitations.
Explanation of benefits, on the other hand, is usually a reconciliation provided after you submit a claim. These often include what was covered by the insurer, how much they paid, and how much you paid.
Good Faith Estimate
Good faith estimate, or GFE is a cost estimate from a healthcare provider or facility for the anticipated expenses of services or items. If you’re uninsured or not utilizing your insurance, you generally have the right to request a GFE before receiving healthcare services.
Additionally, in situations where a provider is not within your insurance plan’s network and intends to charge you more than the in-network cost sharing amount, they must also provide a GFE as part of their notice and consent process.
Out-of-pocket Limit
The out-of-pocket limit is the most amount of money you could pay for your share of the costs of the covered services during a coverage period, which usually amounts to one year. After you’ve reached the limit, the coverage will typically pay 100% of the allowed amount.
The upside of this is that it enables you to plan ahead for healthcare costs. The limit will not include your premium, billed charges, or any healthcare service excluded from your coverage.
Do take note that some plans don’t cover all of your copayments, deductibles, coinsurance payments, or other expenses towards this limit.
Rider
When it comes to health insurance, providers will develop plans that will generally meet the coverage needs of the majority of the population, while simultaneously balancing the risk faced by the insurer. As such, plans may not fully meet the needs of individual clients.
That is where riders come in. Simply put, a rider is an amendment or modification you can apply to your health insurance policy, usually at an additional cost, that offers additional coverage.
In Hong Kong, some of the most popular riders requested include pre-existing riders (which extend coverage for pre-existing conditions, which are usually not excluded by health insurance plans) and maternity riders (which cover the costs of giving birth in Hong Kong).
The key here is that riders do not come free, so you’ll pay a higher premium to add the extra coverage to your plan. Exactly how much extra will depend on the level of risk of the coverage you are asking for.
Underwriting
Underwriting is the process where an insurer will review an applicant’s health and medical information in an attempt to determine if they will extend coverage to that person, and if any coverage exclusions will be attached. During this process, the final premium will also be set.
Provider network
A provider network, also commonly referred to as a Direct Billing network in some countries, is a network of healthcare providers who have agreed to accept payment directly from the health insurer.
In other words, when you receive care from one of these providers, they will bill the provider first. With robust plans, this means you will not have to pay out-of-pocket for care and then submit a claim. Also, provider networks can also determine where you receive care.
Some health insurance providers are quite strict with their network, meaning that if you receive care from a provider who is not part of your insurer’s network (out of network), they may refuse to accept the claim, or may only reimburse a certain percentage.
Therefore, a health insurance provider with a wider network or with more agreeable out-of-network coverage stipulations is often preferred by many expats, especially those who travel regularly.
Exclusion and moratorium
These two terms are often closely linked. An exclusion is any medical care that the health insurance provider will not provide coverage for. There are several exclusions that all providers will include in the majority of plans they offer.
Pre-existing conditions and any care stemming from alcohol or drug addiction are two examples of such cases. Thus, it is important to thoroughly review any plan documentation to learn what conditions are excluded.
Other plans, after underwriting, may have a moratorium attached to certain existing medical conditions. A moratorium, commonly called a ‘waiting period’, is a set period where you can’t submit a claim for a specific medical condition.
These cases will usually vary by plan and coverage element. For example, some plans will attach a waiting period of 12-24 months for maternity coverage. This means that you will have to wait for 12-24 months before you can submit a claim for maternity coverage.
It is, therefore, important to be aware of any moratoriums or waiting periods attached to plans, as they are becoming increasingly popular for high-cost medical care.
Let Pacific Prime Take Care of Your Needs
While there is a lot to consider when looking for health insurance coverage, there are plans out there with excellent coverage elements and agreeable terms, the most popular being international health insurance plans.
This is where Pacific Prime and our team of specialists come in. With over 20 years of experience in providing international health insurance plans, we strive to provide you with tailor-made solutions for each individual needs.
If you have any questions, feel free to contact us for impartial advice and expert knowledge, as well as an obligation-free quote. We’ll be more than happy to protect you and help you settle in Hong Kong!
When she's not typing away on her keyboard, she's reading poetry, fueling her insatiable wanderlust, getting her coffee fix, and perpetually browsing animal Instagram accounts.
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