Difference between exclusion of medical insurance and VHIS

Author Bowtie Team
Date 2021-08-26
Updated on 2021-11-17
What is an “exclusion” in insurance?Exclusions of Voluntary Health Insurance SchemeExclusions of general medical insurance

What is an “exclusion” in insurance?

An “exclusion” is a condition, event, or action that is not covered by the insurance policy. For health insurance, most exclusions are related to body organs, illnesses, treatments, and medications, etc. Under no circumstances will the insured be able to make a claim against the insurance company for the expense of those exclusions.

In general, the exclusions are listed with defined terms in the insurance documents, such as brochures, promotional materials, and the terms and conditions of the insurance policy. It is also the responsibility of the agents and brokers entrusted by the insured to explain the details. Of course, the situation varies from person to person, and after the underwriting process of the insurance company, the “exclusions” on the policy may be increased and may turn out to be “additional exclusions”.

It is worth noting that some insured persons with “special” physical conditions may even be declined or temporarily declined from coverage after the underwriting process.

Since all the insured persons of the same plan are claiming from the same pool of funds, it would be unfair to other insured if some have a greater chance of making a claim due to their own circumstances. Therefore, in order to balance the risk, the insurance company has to take measures such as adding terms like “exclusion”, “declination” or ” temporarily declined”.

Exclusions of Voluntary Health Insurance Scheme

The Voluntary Health Insurance Scheme (VHIS) is launched by the Food and Health Bureau. Insurance companies are required to obtain approval from the authority and meet certain standards when the product is released. Key exclusions of the VHIS are as follows:

  • Treatments, procedures, medications, tests, or services which are not medically necessary

For example, If the insured person is suffering from upper abdominal discomfort and arranges for a gastroscopy to check for abnormality by himself without any referral or advice from a medical practitioner. It is likely that this test will be considered “non-medically necessary” and not covered. It is important to note that the cost of gastroscopy will be reimbursed if there is a medical necessity!

  • Confinement solely for the purpose of diagnostic procedures or allied health services 

Allied healthcare services include physiotherapy, occupational therapy, and speech therapy. Generally, these treatments do not require hospitalization (excluding special circumstances recommended by the practitioner). However, if the insured person is hospitalized before or after receiving allied healthcare services, there is a chance that he or she will not receive any reimbursement from the insurance company for the cost of the hospitalization.

  • Treatment of Human Immunodeficiency Virus (“HIV”) and its related disability*

If the insured person suffered AIDS (one of the HIV-related diseases) before the effective date of the policy and makes a claim for medical expenses, the insurance company will not pay the claim. In case the disease occurs within 5 years after policy issuance  (but the time of the first infection cannot be verified), the insurance company will also assume that the insured person had AIDS before the effective date of the policy, and in such case, no claim will be paid.

The above does not apply to cases of sexual assault, medical assistance, organ transplants, blood transfusions or donations, or HIV infection at birth. Reimbursement will be made in accordance with the insurance company’s terms and other terms in the policy.

  • Dependence, overdose, or influence of drugs, alcohol, narcotics, or similar drugs or agents

Assume that the insured person is addicted to drugs and has developed clinical symptoms such as urinary frequency, urinary urgency, painful urination, hematuria, urinary hesitancy, and urinary incontinence due to the use of ketamine, and subsequently seeks medical treatment for these symptoms, the insurance company will not pay for these expenses.

  • Beautification or cosmetic purposes^

The cost of breast augmentation, rhinoplasty, etc. for the purpose of improving aesthetic appearance will not be covered. However, breast reconstruction surgery or any other plastic/cosmetic surgery performed under the instruction of a doctor due to breast cancer, or due to an accident, is not included in this exclusion. For breast reconstruction surgery after an accident, the surgery would only be covered if it is necessitated by an injury caused by an accident, and the Insured Person receives the Medical Services within 90 days of the Accident.

  • Correction of visual acuity or refractive errors that can be corrected by the fitting of spectacles or contact lens

Many Hong Kong people suffer from myopia, astigmatism, and presbyopia, which are all regarded as “refractive errors”. All optometric services, such as eye examinations, eyeglasses, and even laser vision correction, are not covered.

  • Prophylactic treatment or preventive care, such as body checks

For health and early detection of illnesses, some people in Hong Kong have regular annual/semi-annual body checks. However, no claims will be paid for these check-ups regardless of where they are done (in hospitals, clinics or day centres).

  • Dental treatment and oral and maxillofacial procedures performed by a dentist 

It is recommended that at least one dental scaling should be performed annually, and the process of scaling will probably involve filling, teeth whitening and orthodontic services. These services are not covered.

  • Medical Services and counseling services relating to maternity conditions and its complications or sexual dysfunction

For example, no coverage will be given for sterilization procedures performed after marriage for the reason of not wanting children.

  • Purchase of durable medical equipment or appliances

The purchase of different types of medical equipment and devices for medical conditions, such as glasses for short-sightedness, wheelchairs for mobility problems, and respiratory pressure machines for lung disease, will not be covered. Medical equipment and devices include, but are not limited to, wheelchairs, beds and furniture, respiratory pressure and masks, portable oxygen and oxygen therapy devices, haemodialysis machines, exercise equipment, eyeglasses, hearing aids, special braces, walking aids, non-prescribed medications, air purifiers or air conditioners for home use, and heating devices.

However, this does not apply to medical equipment and devices rented during the hospitalization or day surgery.

  • Traditional Chinese medicine treatment

The scope of traditional Chinese medicine treatment is extensive. In addition to herbal treatment, there are also bone-setting, acupuncture, acupressure, and tui-na massage, etc. There are also many alternative treatments, such as hypnotherapy, qigong, massage, aromatherapy, etc. However, all Chinese medicine treatments are classified as exclusions.

  • Experimental or unproven medical technology or procedure in accordance with the common standard, or not approved by the recognized authority, in the locality where the treatment, procedure, test, or service is received

If you have a family member or friend who had cancer, you may have heard that they were invited to participate in experimental treatment at a hospital/university. Generally, the experimental treatment would be free, but if there is a cost involved, the cost will not be reimbursed. 

  • Congenital Conditions which have manifested or been diagnosed before the Insured Person attained the age of 8

This refers to any medical, physical, or mental abnormality that existed at or before birth, whether or not the abnormality was present, diagnosed, or known at birth; or any neonatal abnormality that occurred within 6 months of birth.

  • Reimbursements under any law, or medical program or insurance policy provided by any government, company or other third party

Suppose you are covered by both group medical insurance (a product of Insurance Company A) and your own VHIS (a product of Insurance Company B). After receiving treatment, you first file a claim with one of these two insurance companies and are fully reimbursed, and then file a claim with the other company. You will not receive payment for this repetitive claim for the same medical expenses.

  • Treatment for Disability arising from war, civil war, invasion, acts of foreign enemies, hostilities, rebellion, revolution, insurrection, or military or usurped power

There is no doubt that there is a chance of losing limbs or body parts due to damage caused by gunfire in war. However, VHIS does not cover the cost of the relevant treatments, because all medical expenses incurred as a result of war are excluded from coverage. 

  • Not applicable to injuries or illnesses resulting from sexual assault, medical assistance, organ transplantation, blood transfusion or donation, or HIV infection at birth, which will be subject to the terms and conditions and other provisions of the coverage.
  • Not applicable if necessary medical treatment is received within 90 days of an accident for the injuries sustained in the accident.

Exclusions of general medical insurance

When comparing the Voluntary Health Insurance Scheme with other health insurance plans, you will realize there are fewer exclusions in VHIS than general health insurance. The following are the general exclusions for some plans in the market:

  • Congenital diseases (also not covered by VHIS)
  • Pre-insured/unknown pre-existing conditions
  • Day surgery, including endoscopy
  • Psychiatric inpatient treatment
1. Are exclusions standardized for all VHIS plans?

Although all VHIS plans are authorized by the Food and Health Bureau, exclusions are not standardized. If the insured is diagnosed with certain diseases or has other health risk factors such as smoking habits, family history, or occupational disease risk, the insurance company may add additional exclusions for individual conditions.

When the insurance company adds additional exclusions, it must amend the Standard Terms and Conditions and/or Standard Schedule of Benefits, or add a supplement, and must clearly define the rights and obligations of the policyholder/insurer involved.

2. Are definitions of exclusions for different insurance plans different ?

Since the Food and Health Bureau regulates the sample policy for authorized products, the definitions of exclusions are generally the same. However, as mentioned above, insurance companies can add additional exclusions and revise policy documents for different clients, so the definitions of these exclusions may vary.

3. Can loading cancel additional exclusions?

As mentioned at the beginning of the article, insurers include “exclusions” to balance the risk, and “loading” is another measure that can “replace” exclusions while balancing the risk effectively.

“Loading” refers to the payment of an add-on premium to reinstate coverage for the original exclusion. Once the policy is in force, the insured can file an appeal on the additional premium if he/she does not suffer from the physical condition/illness of the exclusion anymore. Of course, the above-mentioned measures may not be applicable to all insurance companies, plans and exclusions.

The Food and Health Bureau does not impose many restrictions on the VHIS regarding additional premiums. The decision to charge additional premiums is left to the discretion of the insurance companies.


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