Is Medical Insurance Worth It? Who Needs It?

In fact, anyone with medical needs requires medical coverage. Unless you are a super wealthy individual, never get sick or have accidents, or have an extremely strong constitution that never requires medical attention, a suitable medical insurance can cover actual medical expenses for hospitalization, surgery, and even some outpatient services on a reimbursement basis.

Under medical coverage, the policyholder only needs to pay affordable premiums, while the insured can enjoy coverage for most potential medical expenses as specified in the policy. The insured and their family do not have to worry about sudden accidents or illnesses leading to large medical costs; the insured can also freely choose private medical and nursing services without excessive concern about the expenses.

Beyond that, medical insurance is important in Hong Kong for the following 3 main reasons:

1. Overloaded Public Healthcare System

When it comes to the Hong Kong public healthcare system , the professionalism of medical staff and the quality of equipment are undoubtedly top-notch. However, the overload of public hospitals, teetering on the brink of collapse, is no longer news. According to the Hong Kong Medical Association’s response to the 2018 Budget , the ratio of public to private doctors per 1,000 patients is 0.9:1,000 and 4.5:1,000 respectively, showing a significant gap.

During flu or epidemic peaks, the bed occupancy rate in Hong Kong’s public hospitals often exceeds 100%, with beds placed in hospital corridors becoming the norm. Additionally, the waiting times for specialist outpatient services and surgeries in public hospitals are notoriously long. Apart from emergencies, patients often wait 1–2 years for specialist consultations, with some surgeries taking up to 4 years! No wonder the Medical and Health Bureau admits that the shortage of doctors is the main cause of these long waiting times.

Only with adequate medical coverage can the insured freely choose between public or private medical services without worrying about costs or facing long waiting periods.

2. Medical Inflation

The rising costs of medical care and drugs are a global issue. According to the “2024 Global Medical Trends Survey” released by risk management consultant WTW, the medical inflation rate in the Asia-Pacific region reached 9.9% in 2023, and is projected to remain the same in 2024; for Hong Kong, it is forecasted to rise from 8.27% in 2023 to 8.36% in 2024.

In other words, even if you think your wealth can cover potential medical expenses today, medical inflation could make outcomes exceed expectations; a surgery costing HK$200,000 today might require HK$400,000 in 10 years. When illness or injury strikes later, surgery fees and drug costs could far exceed your budget.

Facing the continuous rise in medical costs, medical insurance can effectively share potential healthcare expenses. If you’re still concerned about coverage limits, consider premium medical insurance products that offer full reimbursement with deductibles to alleviate future worries.

3. Limitations of Company Medical Insurance

Some working professionals think that company-provided group medical insurance (commonly known as company medical insurance) is sufficient and that there’s no need to purchase individual medical insurance. In reality, this idea has several blind spots:

• Coverage Amount Insufficient: Unless you are a director or executive at a company with excellent benefits, general employees (even at manager level) often have limited coverage under company medical insurance, and claims may require higher deductibles.
• Non-Personalized Coverage: Since company medical insurance is decided by management and HR, and is generally a “one-size-fits-all” package, it cannot be tailored to individual needs. Many plans focus on outpatient coverage, with lower benefits for hospitalization and surgery.
• Coverage Gap Periods: As soon as an employee resigns, company medical insurance coverage ends immediately. This creates gaps in medical coverage during job transitions or after retirement.

While company-provided medical benefits are great, working professionals should consider purchasing individual medical insurance to top up coverage—for example, selecting plans with deductibles to avoid overlapping with company insurance.

Most people need medical insurance, but there are two key points to note when subscribing:

Compare Options

There are numerous medical insurance products on the market; for example, mainstream voluntary health insurance schemes alone have hundreds of options. Different products offer varying coverage items, protection limits, and premiums, so you should carefully compare them and select the one that best suits your needs and budget. Avoid blindly following others’ choices or recommendations.

Buy Early

Purchasing medical insurance requires going through the insurer’s underwriting process. If you already have a medical history or minor health issues (such as high blood pressure or diabetes), the insurer may approve the policy with conditions like adding “exclusions” or imposing “additional premiums” (loading). For more serious conditions (such as cancer or heart disease), the insurer might even refuse coverage. Therefore, it’s always better to buy medical insurance as early as possible, while you’re young and in good health, to secure the necessary protection.

First, it’s essential to understand that medical insurance and critical illness insurance serve different purposes:

• Medical insurance: Provides reimbursement on actual expenses for eligible medical costs
• Critical illness insurance: Offers a lump sum payout if the insured is diagnosed with a specified serious illness, helping to cover living expenses during the period of absence from work and allowing the insured to focus on treatment and recovery

Therefore, if you unfortunately develop a critical illness, having only medical insurance might cover your medical expenses but may not address the long-term challenges you’ll face. In reality, a critical illness diagnosis, even if not life-threatening, often forces you to stop working and lose income, which can affect your quality of life and disrupt your existing plans.

Since medical insurance and critical illness insurance provide complementary coverage, a reliable critical illness policy can replace your lost income during your absence from work, providing financial support and minimizing the impact on your family, while maintaining your original quality of life.

In fact, even if you can’t purchase new insurance after an illness, the critical illness payout can help you continue paying premiums for your existing medical insurance.

Critical illness insurance is an essential form of protection that shouldn’t be overlooked alongside medical insurance. In any situation, as long as you have a stable income, you should seriously consider purchasing a critical illness policy to give yourself an extra layer of security.