Hong Kong's private medical insurance market registered an increase of over 60% in overall medical expenditure from 2019 to 2023, according to a new report by the Hong Kong Federation of Insurers (HKFI).
The report, titled "Determinants of Post-Pandemic Medical Inflation: An Analysis of Private Insurance Claims Data" in Hong Kong, found that the double-digit compound annual growth was not due to the unit price of medical services, but a sharp rise of nearly 70% in the claim frequency for inpatient plans, which is directly linked to a surge in day procedures.
The research analysed over 10m inpatient and outpatient claim records, comprehensively comparing the claim frequency, average bill amount per claim, and total medical expenditure before and after the pandemic (2019 vs. 2023).
The findings provide an in-depth analysis of structural changes across demographics, policy types, and medical networks. The findings reflect a worrying upward trend in medical expenditure and premiums in Hong Kong's private medical insurance market. If effective measures are not taken promptly, the long-term affordability and sustainability of the market will face severe challenges.
The study indicates that medical claim expenses in the private market have risen sharply post-pandemic, recording double-digit growth for several consecutive years. If this trend continues, it will severely impact the affordability of premiums for employers and individuals, exert operational pressure on insurance companies, and indirectly strain the public healthcare system.
In contrast, the average bill amount per inpatient claim saw only a modest increase, indicating that the overall expenditure growth was driven by claim frequency, especially for day procedures, rather than by a sharp rise in unit prices.
The study further notes that against the backdrop of an ageing population and a rising prevalence of chronic diseases, more people are suffering from conditions that can be effectively managed by physiotherapists and Chinese medicine practitioners, a trend that is unlikely to be reversed.
The study also found that medical expenses increase significantly with age, and this pressure will intensify as Hong Kong's population continues to age. Expenses rise sharply with age, with the 75+ age group incurring the highest average bill amount.
The study was commissioned by the HKFI and conducted by the Centre for Ageing and Healthcare Management Research of the College of Professional and Continuing Education (PolyU CPCE) at The Hong Kong Polytechnic University (PolyU).
CPCE Dean of PolyU Professor Peter Yuen said, “This study clearly indicates that overall health insurance claims increased very substantially after the pandemic. Such an increase, if it continues at the same rate, will raise serious questions about private health insurance affordability for employers and individuals.
“Furthermore, this growth trend seems to be driven not just by natural changes in the population's health status, but more likely by a shift in citizen behaviour, such as an increased willingness to undergo preventive screenings or elective treatments. This phenomenon warrants in-depth discussion as it pertains to the future use of medical resources."
HKFI CEO Ms Selina Lau said, “The research results reveal that the continuous surge in Hong Kong's medical expenses, which leads to higher medical insurance costs, is no longer an issue for the insurance industry alone but a heavy price for society as a whole to pay. We will discuss with the authorities and we also call on the public to use their medical insurance prudently, especially in a rapidly ageing population, to ensure that medical insurance can truly serve patients in need."