Reporter Chen Jingjing reports from Guangzhou
In recent years, with the support and guidance of government departments, some regions have given full play to the role of market mechanisms to explore and launch urban customized commercial medical insurance (hereinafter referred to as "Huimin Insurance") to meet the needs of regional medical security. According to public data, as of November 15, 2023, a total of 284 "Huimin Insurance" have been launched in various provinces, autonomous regions and municipalities directly under the central government, and the total number of insured people has reached 300 million.
In the mainland, basic medical insurance plays the role of "wide coverage and basic protection", and the items not included in the medical insurance catalogue and the self-paid part of major and rare diseases cannot be guaranteed, while commercial medical insurance usually has requirements for the health status and age of the policyholder, and the premium is relatively high. "Huimin Insurance" has the characteristics of low threshold, low premium, and high insurance amount, which can share high medical expenses for low- and middle-income people and reduce the risk of returning to poverty due to illness.
Recently, the reporter of "China Business Daily" learned from industry insiders that in order to further standardize the "Huimin Insurance" product and promote the smooth and orderly development of business, the State Financial Supervision and Administration and the National Medical Security Administration jointly drafted the "Notice on the Smooth and Orderly Development of Urban Customized Commercial Medical Insurance (Draft for Comments)" (hereinafter referred to as the "Draft for Comments"), which has solicited opinions from local governments.
It is understood that the "Draft for Comments" further promotes the healthy development of "Huimin Insurance" from many aspects such as functional positioning, overall planning, support measures, and standardized operation. Among them, new ideas such as exploring the opening of part of the medical insurance data and encouraging the design of long-term medical insurance with adjustable rates have been widely discussed in the industry.
Many industry insiders told reporters that from the perspective of the "Draft for Comments", the cooperation between social security and commercial insurance for the innovation and development of "Huimin Insurance" may be further deepened in the future, including changing the current actuarial model, coverage of insurance, and promotion and operation methods. Some insiders of insurance companies said that most of the "Huimin Insurance" products are underwritten and operated by property insurance companies, and if "Huimin Insurance" is designed as long-term insurance, it means that it is obviously difficult to replace all property insurance companies with life insurance companies.
Ensure sustainable and healthy development
According to the latest "2023 Urban Customized Commercial Medical Insurance (Huimin Insurance) Knowledge Graph" (hereinafter referred to as the "Knowledge Graph") released by Shanghai Fudan University, in 2020, 2021, 2022, and 2023 (as of November 15), the number of new "Huimin Insurance" products will be 97, 83, 72, and 27 respectively, which has declined year by year.
Due to the large differences in the operation of "Huimin Insurance" products in various regions, some products have been discontinued and withdrawn from the market. According to the above-mentioned "Knowledge Graph" statistics, more than a quarter of the "Huimin Insurance" products have ceased operation. As of November 15, 2023, 211 of the 284 Huimin Insurance products (excluding iteration products) were in normal operation, and 73 products were out of operation, accounting for 25.7%.
At the same time, the analysis of the report "Connotation, Status and Sustainable Development of Huimin Insurance" released by Chinese Life Reinsurance Co., Ltd. shows that "according to our observation of multiple projects, although the total number of insured people has been stable year after year, there are still 20%-30% of the population withdrawing every year, which requires the co-insurance body to pay more costs to acquire new customers to make up for the withdrawal of people, which directly leads to the extension of the insurance period in many places in 2022." Once the government agencies or co-insurance bodies lose their enthusiasm and motivation, or if there are no new customers in the local cities who contribute to the participation rate of 'Huimin Insurance', the survival crisis of 'Huimin Insurance' will come. ”
In fact, due to the fact that "Huimin Insurance" products are generally not limited to age and health status, coupled with the above reasons, whether there will be a "death spiral" due to adverse selection, which will affect its sustainable operation, has always been a topic haunting "Huimin Insurance".
It should be noted that in order to promote the steady and orderly development of "Huimin Insurance" in the next step, the "Consultation Paper" has increased its support for "Huimin Insurance" in terms of functional positioning, overall planning and support measures.
The Draft for Comments clarifies that "Huimin Insurance" should adhere to the guidance of the government and the operation of the market, give full play to the role of government departments in supporting and guiding business development, give full play to the decisive role of the market in the allocation of resources, respect the business attributes of commercial insurance, insist that insurance companies operate independently and bear their own profits and losses, and the people voluntarily take out insurance; Serious illness insurance and other commercial medical insurance should be connected in an orderly manner, maintaining an appropriate level of treatment and long-term stability of operation, and effectively reducing the medical expenses paid by the people;
Data is the lifeblood of insurance products from design to operation. The sustainable and healthy development of "Huimin Insurance" is also inseparable from the drive of data.
The Draft for Comments requires that local medical insurance departments should analyze and judge the diverse medical security needs of the people, support insurance companies to scientifically and rationally design the "Huimin Insurance" protection plan, give full play to the supplementary role of "Huimin Insurance" to basic medical insurance, and enhance the people's sense of gain, happiness and security. Under the premise of complying with relevant laws and regulations, desensitizing and declassifying data, ensuring fairness and justice, and signing a confidentiality agreement with the insurance company, in accordance with the principles of "minimum must" and "the original data does not leave the domain, and the data is available and invisible", explore the provision of part of the basic medical insurance summary statistics to the insurance companies to be involved in the application during the design period of the "Huimin Insurance" protection plan, which will be used to determine insurance liabilities and determine insurance rates.
"The reasonable sharing of basic medical insurance data is not only expected to break the data barriers between medical insurance and 'Huimin Insurance', but also help insurance companies assess risks and costs more accurately, improve the pricing and operational capabilities of products, and then provide consumers with more intimate and suitable insurance products. A person from the product department of a life insurance company said.
Encourage the design of long-term medical insurance
According to the reporter's interview, the "Huimin Insurance" business is a useful exploration and attempt for the integration and innovation of social business. Despite its significant advantages, there are many factors that attract the public to insure, and the absence of any one party may result in the project's insurance and renewal rates falling short of the expected levels. Taking the loss ratio as an example, if the claim ratio is too low, it may lead to the unattractiveness of the product and reduce the enthusiasm for insurance participation, and if the claim ratio is too high, it may lead to the "loss of loss" of the relevant insurance company, which will affect the sustainable operation of the product.
In order to avoid the above-mentioned situation, the Consultation Paper requires that insurance companies carrying out "Huimin Insurance" business should establish and improve an internal control system covering the entire business process, strengthen coordination with relevant departments, effectively identify and prevent business operation risks, and provide information technology support, Third-party institutions for services such as health management of specific drugs and medical devices shall strengthen management and operate in compliance; shall be designed as individual insurance products, and the insurance period shall be reasonably determined according to the protection needs of the people, and long-term medical insurance with adjustable rates shall be encouraged. Liability grading or rate grouping can be appropriately carried out, and the rate can be determined according to the average risk level of the insured in the group: the pre-existing conditions shall not be priced separately, and the deductible and compensation ratio may be appropriately adjusted. The relevant product terms and rates shall indicate the applicable region and be verified through the product intelligent verification system. Strengthen the operation and management of the "Huimin Insurance" business, conduct retrospective analysis every year, and adjust the rate according to the deviation between the actual claim in the policy year and the estimated claim in the insurance plan, so as to promote sustainable operation and protection.
A number of people in charge of the "Huimin Insurance" business admitted that "encouraging the design of long-term medical insurance with adjustable rates" may have a great impact on the market, because property insurance companies do not have long-term health insurance business qualifications, which will lead to many actively participating property insurance companies losing their qualifications to underwrite projects.
The "Knowledge Graph" also shows that about 75% of the products in the "Huimin Insurance" have clear government participation, and among the insurance companies, property insurance companies have the most participation, followed by life insurance and pension insurance companies.
An insurance actuary analyst said that theoretically, the design of long-term medical insurance will help to achieve more accurate risk assessment and pricing, promote the innovation and development of "Huimin Insurance" products, improve the competitiveness of the insurance market, and cultivate people's long-term protection awareness and stabilize psychological expectations, so as to improve the individual insurance rate, but at present, it is still difficult to achieve the long-term medical insurance orientation of "Huimin Insurance", and there will be great challenges in practical operation.
In addition, the insurance company can use the co-insurance method to carry out the "Huimin Insurance" business, the head office should strengthen the management of the branches participating in the co-insurance body, to ensure that the internal control management requirements are in place, the co-insurance body must determine the only main insurance company, which is responsible for issuing insurance policies to the policyholder, accepting claims applications, and other insurance companies should cooperate with the main insurance company to carry out claims settlement services and fulfill the compensation responsibility as agreed. The co-insurance entity shall establish clear collective decision-making and rules of procedure, improve the data sharing mechanism, and the main insurance company shall share the relevant underwriting and claim details data with other insurance companies.
The reporter combed and noticed that many places have adopted the co-insurance model. For example, in 2024, "Dezhou Huimin Insurance" adopts a co-insurance undertaking model, with Chinese People's Property Insurance Co., Ltd. as the main underwriter, and the other 7 insurance companies as subordinate underwriting companies, jointly forming a co-insurance body and jointly responsible for it.
(Editor: He Shasha Proofreader: Yan Jingning)