Since the financial tsunami hit Hong Kong, reports of layoffs and salary-cuts have come one after the other. However, according to a report published by a global HR consulting and outsourcing firm, the cost of medical services will keep increasing.

People are looking for different ways to cut living expenses during the economic downturn. However, the reality is that we do fall ill and medical expenses are unavoidable. In an unfortunate event which requires surgery, a sound medical insurance plan will provide comprehensive cover and a sense of security to the policyholder amid the deteriorating economic situation and rising cost of medical treatment.

However, people rarely need major surgery. In most cases, they would need only simple surgery which may be carried out in a clinic. So, will medical insurance provide benefits for outpatient surgery? Let’s take a look at the example below:

Ms. Li began to suffer from pain and itching in her leg last month. Her situation had not improved after using over-the-counter ointment for a few days so she consulted a doctor and was finally diagnosed with Cellulitis - a bacterial skin infection. Failure to treat Cellulitis could result in amputation. The doctor recommended that Ms. Li undergo debridement－a surgical procedure to remove the damaged tissues of the affected area. This could be carried out in the clinic with no hospitalisation needed.

Although Ms. Li has her own medical insurance, she thought only in-patient surgery was covered. In view of the additional medical expenses and her poor financial condition in recent months, Ms. Li decided to go on medication instead of undergoing surgery. Unfortunately, the infection worsened and the severe pain prevented her from going to work. Ms. Li finally took the doctor’s advice and underwent debridement surgery. However, she needed almost 10 follow-up visits to the doctor before the infection was totally cured.

Many people have a misconception that only treatment received as an inpatient can be covered by their medical insurance plan. In fact, some medical insurance plans such as MSIG Medisure Plus also provide ‘Day Care Surgery’ benefits. (‘Day Care Surgery’ is surgery which could be performed as an outpatient in a clinic.)

Citing Ms. Li’s case as an example, she could have undergone the surgery as an outpatient in a clinic and would have been covered under the extended ‘Day Care Surgery’ benefit of the Hospital Treatment and Services section of her MediSure Plus Policy. With such protection, Ms. Li would not have needed to worry about the medical expenses and, hence, could have opted for timely treatment.

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This article is a friendly reminder about the implementation of the new compulsory insurance requirements of the Merchant Shipping (Local Vessels) (Amount of Insurance Cover) Notice ("Notice").

The new requirements were effected from 2 Jan 2007 and implemented in two phases. In the first phase (i.e. the first 6 months from the commencement of the Notice), the amount of insurance cover is the same as the amount prescribed under the existing Merchant Shipping (Compulsory Third Party Risks Insurance) Regulation, i.e. HK$3 million for existing launches or ferry vessels, or their equivalent classes and types of vessels under the Merchant Shipping (Local Vessels) Ordinance (Cap. 548) ("LVO"), and HK$600,000 for existing pleasure vessels or their equivalent classes and types of vessels under the LVO.

In the second phase, (i.e. 6 months after the commencement of the Notice), the amount will be adjusted to:

1. HK$5 million for a vessel permitted to carry more than 12 passengers, other than a Class I primitive vessel (i.e. Kaitoo) or a Class IV vessel not let for hire or reward.
2. HK$1 million for a vessel permitted to carry 12 or less than 12 passengers, a Class I primitive vessel or a Class IV vessel not let for hire or reward.

Also, in the second phase, Mainland or Macau non-convention vessels entering or remaining in Hong Kong waters will be required to have a policy of insurance or an indemnity arrangement covering HK$1 million for the use or remain of the vessels in Hong Kong waters. The policy of insurance or indemnity arrangement shall be provided by either an authorised insurer under the LVO, or an insurer or a protection and indemnity association approved by the appropriate government authority in the place of registry of the vessel. This requirement is made under sections 49 and 50 of the Merchant Shipping (Local Vessels) (General) Regulation.

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Below is an example of a congenital condition/anomaly:

Chan Tai Man enrolled his son for medical insurance shortly after birth. When the child was one and a half years old, Chan Tai Man discovered that the size of his left and right testis were different. After examination by a doctor, it was confirmed that the child was suffering from Undescended Testicle.

In normal cases, testicles will descend gradually down the abdomen, through a channel (the inguinal canal) in the groin into the scrotum shortly before birth. An undescended testicle is caused by the fact that the testicle cannot descend from the abdomen to the scrotum, which is a congenital anomaly.

The child was admitted to hospital for an operation. Chan Tai Man submitted a claim to his insurance company for hospitalisation expenses. The insurance company declined his claim with the explanation that the disease is a congenital condition, which is excluded from medical insurance coverage.

Insurance intends to cover an insured for events that happen after a policy has become effective. In respect of medical insurance, congenital conditions/anomalies refer to medical abnormalities existing at the time of birth, regardless of the time of discovery. Therefore, it pre-existed the effective date of a policy and is excluded from medical insurance coverage.

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When many companies are closing down as a result of the collapse of financial markets, it is unfortunately unavoidable that many Hong Kong people will face layoffs and/or salary reductions. Employees will understandably be trying hard to keep their jobs, not only to ensure a stable income, but also to enjoy company benefits such as medical insurance. However, as no one is immune to illness, insurance companies encourage employees to take out separate medical insurance on top of their existing group medical insurance to ensure more comprehensive protection.

Nevertheless, traditional medical insurance plans may not provide flexible insurance premiums and coverage; policyholders may end up with duplicate coverage and cost inefficiency. Some insurance companies now provide medical insurance plans with a “Top-up” feature that offers policyholders additional coverage with a discounted premium. Even when the insured loses his/her job together with group medical insurance, they could still enjoy medical coverage at a discount and avoid a healthcare vacuum.

Let’s take a look at the following example:

Mr. Ng is covered under a group medical insurance provided by his company. To enhance his protection, he has also taken out MSIG’s Medisure Plus medical plan as a ‘Top-up’ protection. The rationale behind a ‘Top-up’ medical insurance plan is that Mr. Ng could choose a fixed annual deductible on top of his current medical insurance coverage to enjoy an insurance premium discount. In the unfortunate event of major surgery, Mr. Ng could file a claim under the medical insurance provided by the company first and any costs that exceed the selected deductible could be covered by MediSure Plus, provided those expenses are included under the terms of his policy.

When taking out a medical insurance plan with a ‘Top-up’ feature, Mr. Ng can select an affordable annual deductible based on his financial status. If Mr. Ng loses his job and group medical insurance, he could still enjoy some medical insurance protection at a discounted premium. Apart from alleviating the high premium burden, in an unfortunate event of hospitalisation, Mr. Ng only needs to pay the selected deductible amount, any costs that exceed the deductible would be covered by the ‘Top-up’ medical insurance plan, provided the expenses are covered under the terms of his policy.

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Packaging and marking play a vital part in marine cargo insurance to ensure that you have better protection with enhanced efficiency.

Packaging is one of the major factors that affects the insurance premium. Proper packaging can minimise risk exposure and help you to maintain a good claim history. With a good claim record, your bargaining power as a customer in terms of premium will be higher and the insurance company will offer a more favourable premium for the marine cargo insurance. Apart from saving on premiums, you can also avoid punishment for the delay of cargo delivery to the consignee due to the detaining of goods by the customs caused by improper packaging.

Marking is an important part of packaging, providing information about the consignee, transport route and quantity. The following marking is commonly used:

ABC
FRANKFURT
VIA
HAMBURG
1/200

The first row is the name of the consignee. For safety reasons, secret code can be used (i.e. ABC). The second row is the final destination of the goods (i.e. FRANKFURT). The fourth row is the port for unloading the goods (i.e. HAMBURG). The last row indicates the case number and the total number of cases for the whole lot (i.e. the 1st case out of 200 cases). "VIA" should mean "by the way of" (i.e. Frankfurt via Hamburg).

To conclude, proper packaging and clear markings not only help you to save cost, but also facilitate the process of transportation. 

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Ms. Wong took out a health policy covering Hospital Benefit for 5 years. Recently, she experienced repeated back pain and general malaise over a period of almost 3 weeks. She consulted her doctor who recommended that she be admitted to hospital for a detailed check up. An MRI scan, X-rays, an electrocardiogram, ultrasound and a series of laboratory tests were performed during her stay in hospital. The results of most of the tests were normal except for the ultrasound, which revealed a gallbladder polyp. Ms. Wong was discharged the following day.

Ms. Wong then submitted a claim to her insurance company for the hospital expenses. Her claim was rejected for the reason that the admission was not “medically necessary”. Ms. Wong called her insurance company and asked: “My admission to the hospital was recommended by my attending doctor, so why have you rejected my claim?”

Although the series of tests might have been medically necessary to discover the underlying diagnosis for the insured’s condition, all of them could have been effectively performed on an outpatient basis. As the admission was not due to an emergent condition and the series of diagnostic tests performed could have been carried out on an outpatient basis, Ms. Wong’s hospitalisation was considered not “medically necessary” under the Hospital Benefits section of her policy.

Most hospital insurance policies, including MSIG’s MediSure Plus and Hospital Care Insurance, do not cover unnecessary hospitalisation. This is excluded under General Exclusions:

“Hospital in-patient treatment for conditions which can be properly treated as an outpatient. This includes hospitalisation primarily for diagnostic scanning, X-ray examinations or physiotherapy treatment.”

To avoid any misunderstanding, customers are advised to call the 24 hrs emergency assistance hotline for advice when referred for hospitalisation by their attending doctor.

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How long does an insured person need to stay in a hospital to qualify to claim under a hospital plan? Many people may have the misconception that it is compulsory for them to stay at least overnight to be eligible to claim for hospitalisation expenses. Let’s look at the example below:

Ms. Chan experienced excessive bleeding and abdominal pain during menstruation. Her doctor recommended that she be admitted to hospital for dilation and curettage. Thinking that the minimum confinement period required for claiming against her medical insurance plan should be at least 24 hours, Ms. Chan was hospitalised overnight despite the fact that dilation and curettage is minor surgery and she could have been discharged 4 to 5 hours after the operation.

When Ms. Chan was discharged the next day, she filed her insurance claim, but it was rejected for the reason that there was no need for her to have stayed at the hospital overnight for dilation and curettage.

Generally speaking, dilation and curettage is covered by in-patient plans in most medical insurance. If a patient wishes to stay overnight after surgery for the sake of their own convenience, additional costs such as room and board expenses will be incurred. In this situation, an insurance company may reserve the right to reject the claim.

MSIG’s MediSure Plus insurance plan does not require a minimum confinement period. Using the case above as an example, MediSure Plus would provide coverage for Ms. Chan if she received minor surgery in hospital without staying overnight.

Some medical insurance policies in the market may have a requirement of a minimum confinement period, therefore, when considering non-emergency surgery, customers are advised to check the policy requirements with their insurance company before admission to ensure their surgery is covered.

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Mr. Lam was advised by his attending doctor to have a gastroscopy in a private hospital. Thinking that his medical insurance would cover most of his hospitalisation expenses (the maximum Room and Board benefit of Mr. Lam's medical plan was HK$1,580 per day), instead of staying at a semi-private room (HK$1,300 per day), Mr. Lam decided to stay in a private room (HK$2,800 per day) to enjoy a more comfortable environment at the expense of paying a bit more.

Mr. Lam was hospitalised for two days. He filed his insurance claim immediately after being discharged, expecting to get back most of his hospitalisation expenses of HK$32,320. However, Mr. Lam was only reimbursed HK$18,238, broken down as follows:

Why was the actual claim settlement far less than Mr. Lam expected?

In Hong Kong, surgeons' fees and hospital charges vary by the type of accommodation a patient opts for. The billed amount increases as the level of accommodation chosen changes from ward to semi-private to private. If Mr. Lam had stayed in a semi-private room, the actual expenses incurred would not have been as high as HK$36,600. Therefore, most medical insurance companies in the market have a provision stating that if an insured person opts for hospital accommodation exceeding the “Room and Board” entitlement stated in the table of benefits, the amount payable for Hospital Treatment and Services will be adjusted proportionately based on defined factors.

MediSure Plus will adjust according to the following factor:

Daily rate of Room and Board entitlement / Actual daily rate of Hospital accommodation incurred x 100%

Therefore, the claim amount that Mr. Lam was entitled to was HK$18,238
[i.e. HK$32,320 x (HK$1,580 / HK$2,800) x 100%].

In order to ensure that hospitalisation expenses fall within customers' expectations, they are advised to choose a medical insurance plan incorporating their desired level of accommodation and stick to the Room and Board Benefits they are entitled to.

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Scenario:
Restaurant owner, Mr. Ha imported live lobsters from Australia and arranged freight forwarders to transport the cargoes by air to Hong Kong right after the Hong Kong International Airport commenced operation at Chek Lap Kok. However, due to the initial operational issues of the new airport, the lobsters could not be located until one week later. They were all dead when Mr. Ha received them. As Mr. Ha took out a cargo insurance policy on the shipment, he filed a claim to the insurance company and asked for compensation.

Question:
Can Mr. Ha successfully claim his loss?

Answer:
According to the policy exclusions of Institute Cargo Clauses (Air), "loss, damage or expense proximately caused by delay, even though the delay be caused by a risk insured against" is excluded from the policy. As the immediate cause of Mr. Ha's loss was the delay in the delivery of the cargoes, therefore he cannot claim his loss from the cargo policy. Instead, Mr. Ha may file a claim to the freight forwarders or airlines to seek compensation.

If your customers are going to transport perishable products, no matter whether it is by sea or by air, apart from advising them to take out an appropriate cargo insurance, you can also remind them of the importance of looking for a reliable carrier who will usually take out adequate liability insurance to cover cargo owners' claim of loss of or damage to the cargoes.

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When everyone in the office was discussing the isolation of the Metropark Hotel in Wan Chai to prevent the spread of human swine flu (Influenza A H1N1), Peter told his colleague that he had already taken out an individual medical insurance policy almost 5 years ago and should be covered in the event of an outbreak. His colleague, Wilson, doubted this as his own medical insurance did not cover infectious diseases. Another colleague, Susan, joined the discussion and mentioned that infectious diseases will only be excluded in the case of a worldwide outbreak.

Peter was confused by his colleagues’ comments. Are infectious diseases like human swine flu covered by medical insurance?

If a customer’s medical insurance policy does not exclude “infectious diseases”, even if the human swine flu becomes a “community outbreak” or an “influenza pandemic” or “seasonal influenza”, then customers who are infected with human swine flu within the insurance period will still be covered by their medical insurance plans.

Coverage of different medical insurance policies vary and some medical insurance policies in the market may exclude infectious diseases which require isolation or quarantine by law. Customers are advised to check their policy details with their insurance agents/brokers to ensure that they have adequate protection.

As a comprehensive medical insurance policy, MSIG’s MediSure Plus does not exclude infectious diseases, ensuring that customers are well-protected in case of an epidemic outbreak of human swine flu.

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CriticalCare 1.0
MediSure Plus
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