Voluntary Health Insurance Scheme (VHIS) vs. Medical Insurance: What You Should Know
In early April 2019, the Hong Kong government launched the Voluntary Health Insurance Scheme (VHIS), which offers individual health insurance certified by the Food and Health Bureau (FHB) to comply with the minimum requirements of the scheme in product design.
In this Pacific Prime Hong Kong article, our experts will thoroughly analyze the pros of obtaining health insurance via VHIS over traditional health insurance.
What is the Voluntary Health Insurance Scheme (VHIS)?
The VHIS in Hong Kong comprises the “Standard Plan” and “Flexi Plan”, allowing Hong Kong residents aged from 15 days to 80 years old to apply.
“Standard Plan” offers similar basic inpatient coverage regardless of insurance companies, whereas “Flexi Plan” provides more diversified protection on top of basic protection equivalent to Standard Plan, such as a higher benefit limit and broader coverage to meet different customers’ needs.
Up until June 2023, 32 insurers have participated in the scheme and launched over 409 related products in total, with over 1,000,000 certified policies. Some of the major participating insurers include Cigna, Bupa, and AXA.
VHIS vs. Medical Insurance in Hong Kong
There is a basket of factors you should consider before switching to a VHIS policy. In the section below, we will compare the pros and cons of VHIS and regular medical insurance in Hong Kong.
Each Includes its Own Choice of Coverage
VHIS might have relatively wider coverage than traditional medical insurance.
All VHIS products are required to comply with the FHB’s 12 standard clauses. They must cover psychiatric treatment, outpatient surgery (including endoscopy), diagnostic imaging testing (e.g. CT, MRI, PET, PET-CT, PET-MRI, etc.), and non-surgical cancer treatment, subject to co-payment.
Coverage of “Unknown Pre-existing” and “Congenital” Diseases
One big highlight of the VHIS is its coverage of “unknown pre-existing” and “congenital” diseases. An unknown pre-existing condition refers to an existing health condition that you are unaware of when applying for insurance coverage.
According to the terms and conditions, all Certified Plans will provide partial coverage of unknown pre-existing conditions in the 2nd and 3rd years after policy inception, at 25% and 50% respectively. Full coverage will be provided from the 4th year onwards.
Congenital diseases refer to any mental and physical abnormalities that appear or are diagnosed within 6 months of age. They are subject to the same reimbursement arrangement that applies to unknown pre-existing conditions, as long as the disease is included in the clauses.
Guaranteed Renewal up to 100 Years Old
Hong Kong is notorious for its long queue time in public hospitals and sky-high medical fees. Most health plans only accept applicants under 65, and only 20% allow plan renewal for seniors who are 80 or above. Those who managed to secure a plan will likely find that many conditions are not covered.
VHIS offers a simple solution to this problem. Irrespective of change in your health condition after policy inception, a VHIS plan allows you to voluntarily renew the insurance up to age 100.
No “Lifetime Benefit Limit” is Possible
While most traditional medical insurance plans on the market have a lifetime insurance coverage limit on how much you can claim, VHIS’s benefit limit is calculated based on “policy year”, providing an annual compensation cap of HKD $420,000, which will be reset and recalculated every year.
As chronic illnesses equate to constant and consistent treatments, this is an ideal option for requiring long-term medical care.
VHIS Offers Tax Deduction
The premiums paid for a VHIS Policy are eligible for a tax deduction, including those you pay for yourself and your partner, your children, paternal and maternal grandparents, parents, and siblings. The corresponding amount of tax deduction is proportional to the tax rate, capped at HKD $8,000.
Furthermore, there’s no limit to the number of policies and policyholders who can apply for a tax deduction. See the following example of a taxpayer who purchases VHIS policies for himself and his specified relatives (in HKD $).
| Insured person | Annual Premium Paid | Eligible premium amount (capped at $8,000 per insured person) | Amount of tax saved (assuming tax rate is standardized at 15%) |
| Taxpayer | $5,000 | $5,000 | $750 |
| Spouse | $4,100 | $4,100 | $615 |
| Grandmother | $16,000 | $8,000 | $1,200 |
| Father | $12,000 | $8,000 | $1,200 |
| Mother | $11,000 | $8,000 | $1,200 |
| Son | $2,500 | $2,500 | $375 |
| Total | $50,600 | $35,600 | $5,340 |
Premium Transparency
All insurance companies must publish the premium schedules of their Certified Plans in an effort to be transparent and protect consumers’ rights. You can access the premium schedules of all Certified Plans on their website and the official VHIS website.
Furthermore, you are eligible for a 21-day cooling-off period during which you can cancel the policy at any time and receive a full refund. This period will be immediately terminated once you have made your first claim.
Choose Your VHIS Plan Carefully
If you already have a healthcare insurance plan, switching to the standard plan of VHIS is not recommended. It is likely that you won’t retain 100% of the coverage items in your old plan, such as kidney dialysis, private nursing fees, and bed charges for accompanying family members.
If getting the most out of your insurance plan is your priority, joining the Flexi Plan may be a better option since you can flexibly add benefit items according to your needs.
Contact Our Experts
At Pacific Prime Hong Kong, we can help you find the best insurance plan for your needs and budget. Reach out to our insurance advisors and receive a comparison of plans from individual health insurance to family insurance.
Additionally, we provide unbiased insurance advice and an obligation-free quote so you can make the best choice for you/your family. So do not hesitate to contact us today!
His expertise encompasses a broad range of areas including international health insurance, employee benefits solutions, motor insurance, life insurance, and various other forms of general insurance. This breadth of knowledge enables him to distill an array of complex insurance concepts into a series of progressive, easily understandable articles.
Anthony earned his Bachelor of Arts degree from Lingnan University, majoring in Translation and minoring in English. He also studied at West Virginia University in the United States as an exchange student.
When he’s not working, Anthony can typically be found on the badminton court, in the gym, or at the cinema.
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