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[In-Depth]: The Ultimate Guide To Health Insurance In China

We've got you covered, so you can get covered.
2016-03-11 18:03:06
You need health insurance. We all do. Bones break, appendixes burst, and scooters crash. But finding the right plan for your specific needs is a complex, confusing mess. Who do you buy from? How much coverage should you get? What should you know before purchasing? To dig out the answers, SmartShanghai called health insurance companies, met with brokers, consulted with a law firm, and spoke with hospital administrators.

This is the in-depth, mammoth, ultimate guide to individual health insurance in China. Check it.

The Main Types Of Health Insurance In China

In-Patient Coverage

In-patient coverage is the most basic and core component of any health care plan, and everyone should have it regardless of age, fitness, and health history. In-patient care is when a doctor formally admits you into a hospital overnight or several hours during the day, typically for immediate, serious, and often life-threatening scenarios like car accidents, viral diseases, poisonings, and other costly conditions.

In-patient coverage plans typically have maximum cost limits and include services like medical evacuation (the helicopter that carries you from that mountain you fell off in Guilin to the nearest good hospital) and medical repatriation (transport to a different hospital if the current hospital cannot treat your condition). Some in-patient plans often cover repatriation of remains (sending your body back home if you die overseas).

Approx. Cost: 5500rmb (limited coverage) to 20,000rmb (best coverage) per year for a healthy 25 year old.

Out-Patient Coverage

Out-patient coverage makes up 85% of all insurance claims and refers to medical care that doesn’t require a hospital admission of more than 12 hours. This ranges from going to the doctors office for a common cold to surgery to long term diseases like diabetes and cancer.

How much coverage you have depends on your plan, and out-patient plans cannot be purchased without in-patient coverage. Payout maximums on plans range from 10,000rmb to ones without limits (but they will still be limited by your core plan -- the in-patient plan). Most plans cover medical practitioners, prescription drugs, specialists, diagnostic testing, and vaccinations. Some plans also include eye exams and prescription glasses, chiropractic treatments, herbal medicine, acupuncture, visits to the psychiatrist, as well as a small limit on emergency out-patient care (see below). What is provided ultimately depends on the specific plan, which you'll need to get into the fine print for.

Approx. Cost: An additional 80-150% of the in-patient premium.

Additional Options

Wellness Care

Wellness coverage refers to screenings for underlying conditions. Insurers cover up to a certain annual amount, which you can spend at a clinic of your choosing on diagnostic tests. Benefits individuals and insurers by catching problems early.

Approx. Cost:
1500-5500rmb per year.

Maternity Care

Maternity care is expensive and most plans require that it be purchased at least a year before pregnancy for a claim to be filed successfully. It covers any medical costs resulting from pregnancy and childbirth and the welfare of your newborn.

Approx. Cost:
10,000-35,000rmb per year.

Dental Care

Dental coverage varies widely depending on the insurer. They generally have co-pays, and some include cleanings and preventative care while others don’t. Emergency dental care is often covered in the in-patient coverage.

Approx. Cost:
1,500-13,500rmb per year.

Wait, Can't I Just Get Travel Insurance?

People often use travel insurance as a cheap way to get insured in China. What many people don’t realize is that travel insurance stops working the second you become a resident (i.e. you get a job or become a full time student). It will still work when you travel to other countries, but not in your place of residency -- China.

If you live in China and often travel to other countries, it’s a good idea to have travel insurance. But, according to Carsten Creutzburg and Chris Hudges at Unistar Insurance Brokerage & Consulting, travel insurance is inherently designed to send people back home, where travel insurance is no longer obligated to cover them. And in such cases, you’ll want an actual insurance plan.

"The thing to realize is [that] a medical insurance policy to cover you for major medical for say, a 25 year old, anywhere outside their home country, except for USA, will cost around about 1000 US dollars. Travel insurance for a year will cost them 110 US dollars. Why do they think they have a policy as good as the 1000 dollar one? It's like buying a car -- you only get what you pay for." -- Chris Hughes, Managing Director of Unistar, Health & Employee Benefits Division

Are Pre-Existing Conditions Covered?

Signing up for health insurance involves answering a long list of questions about your health, including drug and alcohol history, BMI info, and most importantly, pre-existing conditions like heart disease, diabetes, and other expensive issues that developed and were discovered before getting on a insurance policy.

According to Creutzburg, unless you live in a place that has universal healthcare (Hong Kong, most of Europe, Canada, etc) or one that requires insurers to cover pre-existing conditions (United States), insurance companies typically *do not* cover pre-existing conditions. This includes those operating in China.

So what is covered?

Insurers will still cover conditions that exist but were unknown to you. So if your doctor tells you that you've had cancer for the past few months, but your health plan only started last month, the new plan will cover treatment costs as long as the cancer hadn't been discovered by another doctor before your plan began and you were unaware of it.

Once you have health insurance, insurers cannot increase your premium due to any new conditions you develop. Even when your contract ends and the plan is renewed, the insurer cannot raise the fee. However, they can raise it due to other factors such as age and yearly cost increases, but these increases are raised equally among all customers.

The safest thing to do, says Creutzburg, is to get on a good insurance plan while you are young. That way, should you develop a condition, you will be covered.

What about when I move back home?

This is really, really important. Make sure that the plan you get is transferable to any country you plan on moving to in the future. If the plan is not transferable, you’ll have to get a new health policy that may not cover any conditions you developed on your current plan.

Health Insurance Companies In China

Many expats have insurance policies in their own countries and travel on international booster packs. Then there are those that buy international insurance policies that cover them anywhere outside their home country. Both of these types of insurance companies are licensed in the country they operate from but are not licensed or regulated in China.

That doesn't mean these plans won't work in China -- many of them do. The disadvantage of insurance companies that aren’t licensed in China is that they may not be experienced in dealing with hospitals in China. They generally won't have Chinese-speaking support staff, and may have difficulty directly billing Chinese hospitals. In addition, if there is some dispute with your insurance company, there is no way to take legal action against them in China. You would have to do it in the country they operate from.

If you plan to live in China for several years or more, you will likely want a insurance plan that is licensed in China.

The Major Health Insurers In China

Each insurance company has their strengths and weaknesses. The one to go with will depend on your individual circumstances. Here's a list of the major, reputable health insurers in China that you're likely going to end up choosing from. According to Unistar, these companies are licensed or work with licensed partners to sell their insurance products.

CIGNA — The largest health services organization in the world. They have a comprehensive range of products and are partners with China Merchants Bank.

Did you know?

Unbeknownst to both expat workers and employers alike, the Ministry of Human Resources and Social Security requires that companies open social security accounts that include health insurance for all foreign workers with valid work permits. These are the same benefits offered to all Chinese employees.

According to Natalie Yu, lawyer and partner at Li Yan, the law, the Interim Measures for the Participation of Foreigners Employed in China in Social Insurance, has been effective since October 15, 2011.

The crucial piece, Article 4, states: "If an employing unit employs a foreign worker, it shall, within 30 days of the date on which the employment certificate is handled, make social insurance registration for the foreigner.”
Aetna — American-based Fortune 100 company with the biggest platform for healthcare management. They are partners with China Life, the largest Chinese insurance company and have a range of products.

AXA TP — One of the biggest insurance companies in the world. They have a insurance just for China and also sell auto insurance, liability insurance, and many others.

Ping An Health — Shenzhen based company that has a unique wellness program called Vitality that keeps track of one’s health and offers discounts for those that maintain a healthy lifestyle.

MSH — A French insurer with the largest high-end client base. According to Unistar, they offer cost effective maternity coverage.

Bupa — The largest British medical insurer that has a partnership with AllTrust, a Chinese insurance company.

Allianz — German-based and also one of the largest insurance companies in the world. According to Unistar’s Creutzburg and Hughes, they have the best claims administration in international medical insurance.

Global Benefits Group — Claim to be the “largest independent, fully integrated provider of international benefits in the world”. Partners with Taiping Life and have one of the largest insurance networks in China.

Now Health — One of the newer health insurance providers in the market. They partnered with Minan insurance in 2014 and have a wide hospital network.

Brokers vs Agents And Who To Buy From

What's the difference between agents and brokers?

Both agents and brokers sell insurance on behalf of insurance companies and make money through commissions. A broker can represent every insurance company and every insurance product in the country where they are licensed. Typically an agent can only represent a single insurance company, but in China the rules are slightly different and you might find agents representing several insurance companies. However, brokers can sell several types of insurance, including life, medical, and commercial insurance. Agents can only sell one type of insurance.

Agencies are generally far easier and cheaper to set up, whereas to start a licensed brokerage, according to Hughes, requires 60 million rmb and a company that is 75% Chinese owned. If you choose to buy insurance through a brokerage, be sure that they are properly licensed.

Should You Buy Through A Broker?

Wendy Wang, the third party payer (TPP) -- a.k.a. insurance companies -- coordinator of Shanghai United Family Hospital and Clinics says that ultimately the decision is up to the buyer. If there's a specific insurance company they want to buy from, they can go directly to that company. But brokers have their advantages.

"Brokers have more information about insurance products because they have many products in their hands, and they know which price is best suited for the patient." -- Wendy Wang at Shanghai United Family Hospital and Clinics

For individual insurance, buying through a broker costs the same as buying directly from the insurance company (brokers can get discounts on business insurance policies). A good broker will known the in and outs of every insurance policy, whereas buying on your own requires you to research everything on your own, and even then you may not understand all the terminology. Another benefit of buying through a broker is that they are a second avenue of legal recourse if there is a dispute with your insurance, or if you believe you bought something that was falsely advertised to you.

But not all brokerages are made equal. A good broker should provide you with several viable options for your specific situation, and you should never feel the broker is pushing you to buy one specific insurance. They should help you settle disputes and assist you as long as the insurance plan you bought with them is active. Brokerages that spend large sums of money on advertising might not actually have good reputations, so the best way to find a good broker is word of mouth.

Eight Things To Know Before Purchasing Insurance

“When insurance companies sell the products, they will say 'hey you should buy this plan, this plan is very good, you’ll see doctors at United Family.' But when the patients actually come, then they will just realize that they have very high copay, and they have special copay for high value surgeries.” -- Joy Han, CROO of Shanghai United Family Hospital and Clinics

It's important to know what you're paying for when you buy insurance. You want to be as informed as humanly possible. So here are some key things you should find out from your insurer or broker before purchasing.

1. Does the hospital you want to go to take your insurance? If you have a specific hospital or doctor you want to go to, make sure they have an agreement with the insurer you are buying from. In addition, know what hospital you want to be sent to in the case of an emergency. Call your insurance and the hospital to make sure that they recognize each other and offer direct billing.

2. How does direct billing work? Direct billing is where the hospital has a contract with your insurer so that they pay directly for treatments and doctor's visits. With direct billing, the patient doesn't have to file a separate claim with the insurance company or open their own wallet to pay and get reimbursed. Different insurers have different hospital networks and different services that they can direct bill for -- you should find these out before buying your plan.

3. Does your insurer cover day cases or only overnight stays? Day cases is the term for emergency situations that necessitate a formal hospital admission but not an overnight stay. Some insurers count day cases as in-patient care, and some count it as out-patient care. Find out if an overnight stay is required to be counted under in-patient coverage and if your plan covers emergency out-patient visits.

4. Are the services you want covered? Do you want coverage for vaccinations, chiropractic treatments, therapy, or Traditional Chinese Medicine? Plans are different so don’t assume that all services are covered.

5. Pre-existing conditions: will yours be covered? Can you get a group plan to get coverage? What are the alternatives? Should you leave your current health plan? You don't want to lose existing coverage when you make a switch.

6. What are the waiting periods? Some types of insurance have waiting periods, where coverage for certain services doesn't begin until months or years after you first start paying for your plan. These services can include maternity, psychiatry, wellness check ups, dental, and other types of care. Be aware of when your coverage actually starts.

7. Deductibles and Copays: A deductible is the amount you must pay for a treatment before your insurer starts paying. A copay is the fee you must pay for each visit for a treatment. Some copays and deductibles are different for foreign hospitals. Don't assume that they are the same, as you might end up paying a 20% copay on expensive treatments.

8. What Is A Treatment Guarantee Letter? A treatment guarantee letter is an official approval from your insurer for a treatment. These take two to five days to process for expensive out-patient care or in-patient care where treatment isn't necessary immediately. Make sure you get your guarantee letter and that your treatment is covered before you go to the hospital for a major treatment.

What Happens When You End Up In The ER?

Big Chinese hospitals like Zhongshan and Huashan have VIP urgent care clinics that will recognize many insurance companies -- both international and those licensed in China. But these places are only open during regular business hours and a few hours on Saturdays, so if you have an serious accident during the weekend, you're likely to end up in the local emergency room.

United Family, a foreign invested hospital that has a 24 hour emergency room, will treat you if the doctor deems your situation to be life-threatening even if you can't pay on the spot. The situation is different for Chinese emergency rooms. Some Triple A rated hospitals like Diyi Renming will accept direct billing from insurances even for emergencies, but you'll need to have your insurance card and your passport or work permit ID with you. Others like Ruijin, Huashan, and Zhongshan say that they don't accept insurance in their local emergency rooms. That's what the people in the emergency room departments told us, anyway.

We have heard of some cases where people were able to pay directly in Triple A hospitals that claim to not accept insurance. It really can depend on who's in the hospital that day and whether or not the staff are familiar with individual health insurance, so you may have to pay first then get reimbursed. If you don't have the money on you, Triple A hospitals have what's called a "Green Lane" that treats patients if the director of the hospital signs off on it -- basically if you're someone important or if they believe you will be able to pay for it later. It is generally not based on medical need.

"We have heard stories [of people dying in waiting rooms] over the years. The situation varies between each treating facility in China, but clearly making sure you have proper health insurance coverage is the best idea, and keep an emergency fund in case the treating facility needs it." -- David Bortz, General Manager of China Expat Health, Health Insurance Division

Things are worse in lower tier hospitals, where you have to pay in cash, upfront. No Green Lanes here. If you come to this kind of hospital without money, you won't be treated, even in life or death situations. You might run into these hospitals while on a trip to a smaller city, or even in Shanghai, where several exist.

Therefore, having health insurance in China may not be enough in some cases. You need to know which hospitals your insurance company have a relationship with and where you can go in an emergency situation. Your insurer will try to work with any hospital you end up at, but a direct payment may not be accepted, and thus, in some cases, you won't get treated. It's a good idea to carry the phone number of a close friend or family member in your wallet, so that the police or the hospital can call them to help you in cases where you're unconscious and unable to pay.

What Insurance Plan Should You Get?

What insurance plan you get ultimately depends on your situation. How old are you? Are you moving to another country soon? Do you plan on going back home? What can you afford? Are you about to have a family? Do you have any pre-existing conditions? The answers to these questions will determine the insurance policy best suited for you. But generally, even young healthy people should get a basic insurance policy with in-patient coverage. Things happen.

"Be covered for the major problems. Young people don't need to buy everything -- out-patient, dental, wellness --- for unlimited coverage. It's not necessary. You just need to be covered." -- Carsten Creutzburg, Operations Manager, Unistar

Accidents and disease can happen to anyone, and if you're a foreigner, you're probably not on the state instituted social insurance program, meaning you're uncovered. A basic in-patient plan is affordable for most expats in Shanghai and having it means that you won't have to break the bank if you break your body. So safeguard yourself.