Diverging views of insurers and members increasingly apparent in international private medical insurance (IPMI)

Organisations are exploring local plans as a means to achieve potential cost savings and augment employee benefits, writes Steven Luk.

Beginning even before the COVID pandemic, we can observe a stark difference in opinion where the high premium rates that international private medical insurance charges lead insured members to expect that any medical expense would be fully covered without exception. This gap in opinion is widening, especially in recent years, as premium rates increases for IPMI directly result from the escalating charges by medical providers worldwide.

Furthermore, the escalating medical charges have prompted insurers to review their claims guidelines where emphasis is shifted to asserting the medical necessity and even evaluating the conventional charges of a medical procedure. This can be seen in cases where doctors have recommended an excessive number of physiotherapy sessions, prompting further inquiries from IPMI insurers on the medical necessity. It is important for insurers and advisers alike to attempt to shrink this split in opinion by delivering transparency on claims practices and cost drivers. Insured members must have a deeper understanding of the sustainability of IPMI products that they have or are considering subscribing to.

Moreover, organisations across various sectors are currently faced with the constraint task of tightening their financial budget in anticipation of an economic downturn. Consequently, they are exploring the viability of moving from an IPMI plan to local plans that offer potential avenues for cost savings. By carefully examining these alternative options, organisations seek to strike a balance between optimising their financial resources and catering to the healthcare needs of their employees. The potential surplus resulting from this shift can then be channelled into other areas where the organisation can extend additional employee benefits or facilitate reimbursements, thereby fostering a more comprehensive and holistic approach to employee welfare.

Furthermore, it is worth noting that the landscape of competition among brokers and insurers has always been characterised as fierce. However, the sustained availability of a significant number of IPMI providers in Hong Kong has contributed slightly to a reduction in this competition. The availability of choices, coupled with variations in service support and premium structures, has allowed for the emergence of distinct market segments. This environment provides a fertile ground for different cohorts of insurers, brokers, and insured members to identify their niche and cater to specific requirements from different segments. In turn, this diversification ultimately benefits the insured members, as they gain access to a broader range of options that are tailored to their unique needs and preferences.

In summary, the divergence of opinion between insurers and insured members regarding IPMI has become increasingly apparent. Organisations, aware of the need to economise, are exploring local plans as a means to achieve potential cost savings and redirect surplus funds to augment employee benefits. Meanwhile, the vibrant landscape of IPMI providers in Hong Kong offers a diverse array of choices and market segments, thereby fostering healthy competition and enabling insured members to find the most suitable options for their individual or corporate circumstances.

This article was first published on Healthcare & Protection Hong Kong roundtable report.