Old-style medical insurance not enough? Three ways to cope with rising medical costs in Hong Kong

Private hospital medical costs are continuously rising. According to a report, Hong Kong’s medical cost inflation rate is expected to reach 9.8% in 2025¹. By contrast, salary increases for Hong Kong workers are often only around 3%², so wage growth is not keeping up with medical inflation.

Some people purchase medical insurance as a safety net for themselves and their families, but with steadily rising medical costs, older medical insurance policies bought years ago (non-VHIS) generally set per-item benefit limits. Even if they include SMM (Standard Medical Protection) terms, the coverage is still insufficient to cover current medical expenses. Facing the growing challenge of a medical protection gap, this article breaks down how to handle inadequate coverage.  

Before the Voluntary Health Insurance Scheme was launched in 2019, traditional medical insurance generally imposed many restrictions, such as per-item benefit limits, lower annual total coverage, and non-guaranteed renewability (older people could be declined). People who bought medical insurance in the 2000s or earlier might have coverage limits of only several hundred thousand HKD per year; when a simple stent procedure at a private hospital now costs HK$200,000 to HK$300,000, and complex cancer treatments may require over a million, old-style medical insurance can easily be insufficient to cover the costs. Later, the market introduced medical plans that remove itemized limits and pay in full³, providing policyholders with more comprehensive medical protection.

To encourage people to take out insurance, the government launched the Voluntary Health Insurance Scheme, offering guaranteed renewability up to age 100, basic plans without lifetime benefit caps, coverage for pre-existing conditions that were unknown before application, and standardized benefit items such as specified diagnostic imaging tests, non-surgical cancer treatments, and greater premium transparency, which has raised public awareness of medical protection.

In fact, to address the insufficient coverage faced by holders of old-style medical insurance, policyholders can consider the following three approaches to cope with medical cost challenges. 

If the policyholder can afford it and their health has not changed (compared with their health when they took out the previous medical insurance), they may consider surrendering the existing policy to buy a new one, or purchasing an additional medical insurance plan with higher coverage that better matches current healthcare costs.

However, when buying another medical insurance policy, the policyholder will need to undergo underwriting again. If the policyholder has previous claims history, the insurer may increase premiums or add exclusions.

As a reminder, policyholders should ensure the new policy is in effect before cancelling the old one to avoid any coverage gap. In addition, if a policyholder makes a claim shortly after the policy becomes effective, the insurer may need more time to review it. Therefore, policyholders should fully declare their health condition when applying so the insurer can carry out appropriate underwriting and reduce difficulties in future claims.

There are many medical insurance products on the market and consumers can easily become overwhelmed. Want someone to help explain complex policy terms and understand the coverage of different products? You are welcome to contact 10Life insurance advisers on WhatsApp for enquiries. 

If the policyholder has a limited budget or their health condition makes it unsuitable to seek new insurance, they can allocate medical resources according to the urgency and complexity of the treatment. For minor to moderate surgeries such as haemorrhoid removal, they can choose a private hospital, which offers a more comfortable environment and faster service without excessively depleting their insurance coverage limits.

If the policyholder unfortunately faces a serious illness, they can first have examinations at a private hospital and then take the relevant reports to a public hospital to be scheduled. While waiting, they can receive treatment privately and, when the insurance limit is used up, transfer to the public hospital to continue care. This saves diagnostic time, ensures appropriate treatment, and can greatly reduce the patient's financial burden. 

Currently Hong Kong’s public healthcare system has long waiting times and private hospital services are expensive, but medical care in the Mainland is relatively cheap, which has attracted many Hong Kong residents to travel north to see doctors.

A report indicates⁴ that the same oral lung cancer drug, a box of 30 tablets, costs about RMB 4,966 (approximately HK$5,400) at the University of Hong Kong - Shenzhen Hospital in the Mainland, while in Hong Kong it is about HK$33,000 — meaning Hong Kong is roughly five times more expensive. Some of Hong Kong’s more progressive doctors will write referral letters to schedule patients at Mainland hospitals; after being examined and diagnosed by the oncology team, patients can obtain the medication and can continue to consult their original doctor upon returning to Hong Kong.

In addition to being relatively inexpensive, top hospitals in first-tier cities such as Beijing, Shanghai, and Shenzhen have medical standards that meet international levels, and travel between Hong Kong and the Mainland is convenient. For people with limited insurance coverage, this option can both save costs and provide high-quality medical care. However, the Mainland’s healthcare system differs significantly from Hong Kong’s; patients need to adapt to different appointment procedures and communication styles, so it is advisable to prepare and learn about the arrangements in advance. 

If a policyholder's medical insurance coverage is insufficient, it is indeed a challenge, but not unsolvable. Whatever strategy is adopted, early planning and flexibility are key to ensuring access to appropriate medical care when needed. If you have questions about medical insurance or would like to learn more about coverage options, feel free to contact 10Life insurance advisors via WhatsApp. 

Last updated: 13 June 2025

Notes：
1.International risk management consultancy WTW's "2025 Global Medical Trends Survey" report
2.2024 Salary Increase Slightly Dips for Hong Kong and Greater Bay Area Employees Employers Cautiously Adjusting Rates
3."Full reimbursement" in insurance, especially medical insurance, refers to there being no sub-limit per item; the insurer will pay the full amount of eligible medical expenses after deducting the insured's co-payment. However, "full coverage" is also subject to conditions such as annual and lifetime benefit limits, medical necessity, reasonable and customary charges, pre-existing conditions prior to underwriting, etc.
4.High drug prices | Lung cancer drugs in Hong Kong are five times more expensive than in the Mainland — Concern group: Does the Hong Kong government have the resolve to negotiate with drug companies? 

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.