Economic Observer reporter Jiang XinOn January 9, 2024, the reporter of the Economic Observer Network learned that the State Administration of Financial Supervision issued the "Notice on the Smooth and Orderly Development of Urban Customized Commercial Medical Insurance (Consultation Draft)" (hereinafter referred to as the "Consultation Draft") to insurance companies, and solicited opinions from various companies. This is the second time that the development policy of urban customized medical insurance has been solicited for comments.
In October 2023, the State Administration of Financial Supervision and the National Healthcare Security Administration jointly drafted the Notice on the Smooth and Orderly Development of Urban Customized Commercial Medical Insurance (Draft for Comments) and solicited opinions from various localities.
Urban customized medical insurance is known as "Huimin Insurance" in the market, this product originated in Shenzhen in 2015, blossomed all over the country in 2020, and then ushered in the first regulatory document in June 2021 - "Notice on Regulating the Urban Customized Commercial Medical Insurance Business of Insurance Companies".
*Endorsement, low cost, low threshold, no age limit, no occupation limit, and no need for health notification are the main features of "Huimin Insurance", and they are also the reason why this product has sprung up all over the country.
It is worth noting that after several years of development, "Huimin Insurance" in some cities has begun to have problems such as the decline in the number of insured people, the increase in the loss ratio, and the lack of a strong sense of gain among young people. At a higher level, multi-department joint standardization of this insurance product with regional characteristics is conducive to solving the problems faced in the development process of "Huimin Insurance".
Clear positioning
From the nature of view, 'Huimin Insurance' is a commercial insurance, because it is voluntary insurance and there is no ** subsidy; It also belongs to supplementary medical insurance, because the insured must participate in basic medical insurance in order to apply for Huimin Insurance, and it is connected with basic medical insurance; It is also an urban customized insurance, which is designed differently according to the specific policies of basic medical insurance in different places; It is also an inclusive insurance with low premiums and high sum insured; It also belongs to Internet insurance, which basically uses online insurance and online claims. ”
Wei Yingning, former vice chairman of the China Insurance Regulatory Commission, once talked about the development of "Huimin Insurance". In his view, as an inclusive supplementary medical insurance, "Huimin Insurance" solves the problem that residents who have participated in basic medical insurance need to pay too much medical expenses out of their own pockets, or because testing and ** drugs are outside the reimbursement list of basic medical insurance.
Therefore, in the Consultation Paper, the first issue to be mentioned is the function and positioning of "Huimin Insurance". The "Draft for Comments" mentions that customized medical insurance should adhere to market operation and guidance, give full play to the decisive role of the market in resource allocation, better play the role of the first department in supporting and guiding business development, respect the business attributes of commercial insurance, and insist that insurance companies operate independently and bear their own profits and losses, and the people voluntarily insure themselves.
In terms of protection, the Draft for Comments proposes that customized medical insurance should meet the actual medical security needs of the local people, focusing on ensuring reasonable expenses outside the scope of the basic medical insurance policy and higher expenses borne by individuals within the scope of the policy.
In terms of the population covered, the Draft for Comments proposes that customized medical insurance should be based on relevant data such as local basic medical insurance and serious illness insurance, scientifically determine the level of insurance liability and rate, widely cover the basic medical insurance participants, include the elderly, pre-existing conditions and other groups into the scope of protection, and encourage the expansion of protection objects to new citizens and other groups. Employers are encouraged to make full use of preferential tax policies and purchase customized medical insurance for employees.
The draft also states that the dispatched agencies of the State Administration of Financial Supervision and local medical insurance departments should guide insurance companies to fully consider the level of local economic development, medical security and the people's spending power, strengthen the feasibility demonstration and risk assessment of customized medical insurance, and areas with mature conditions can explore and promote, and areas with immature conditions should not blindly follow the trend.
According to the "Research Report on the Development Model of Huimin Insurance" released by the Health Economics and Medical Security Research Center of Nankai University and Yuanxin Huibao, as of the end of December 2022, a total of 246 "Huimin Insurance" products have been launched across the country, with a cumulative premium scale of about 32 billion yuan, and the total number of insured people has reached 29.8 billion, covering 28 provinces and municipalities and more than 150 regions.
The popularity of "Huimin Insurance" once caused a discussion in the insurance industry about the squeezing effect of "Huimin Insurance" on medical insurance.
In terms of sales, the "Draft for Comments" also mentions some negative behaviors: all localities should adhere to the principle of voluntary insurance when carrying out customized medical insurance, and shall not be forced or disguised compulsory insurance, shall not apportionment of insurance task indicators to the grassroots, shall not be sold or forced to tie in with basic medical insurance, and shall not set unreasonable operational index constraints. When the dispatched agencies of the State Administration of Financial Supervision and local medical insurance departments support the promotion of the project through press conferences and official channels, they should accurately interpret the difference between customized medical insurance and basic medical insurance, avoid the public misunderstanding or confusion about the relationship between commercial medical insurance and basic medical insurance, and promote the formation of reasonable protection expectations for the public.
Group orders are allowed to encourage the design of long-term medical insurance
It is worth noting that, compared with the previous Consultation Draft, the recently issued Consultation Draft has undergone changes in the form of insurance.
The Consultation Paper clarifies that insurance companies should fulfill the main responsibility for product development, and customized medical insurance should be designed to be suitable for individuals and insurance products purchased by groups not for the purpose of purchasing insurance. The previous version of the Draft for Comments stated that the focus would be on investigating and dealing with "conducting business in the form of group orders".
At a seminar on the development of "Huimin Insurance", in the face of the decline in the number of insured people year by year, many relevant persons in charge of local medical insurance bureaus have mentioned this form of insurance.
In the case of insufficient insurance coverage, it is particularly important to adjust the structure, but it is absolutely not possible to take the form of not selling what is needed and not selling the elderly, which will quickly enter the 'death spiral', and the people will also resist. In order to truly meet the market demand and do people's livelihood projects, the structure can be adjusted in the form of the development of group orders, and it may be difficult for insurance companies to develop, such as entering colleges and universities, but the first department is okay. A relevant person in charge of a local medical insurance bureau once said.
The Consultation Paper also mentions the issue of rate adjustment of "Huimin Insurance": the insurance period is reasonably determined according to the protection needs of the people, and the design of long-term medical insurance with adjustable rates is encouraged.
The Consultation Paper proposes that customized medical insurance can be appropriately classified or rate-grouped, and the rate can be determined according to the average risk level of the insured in the group; Pre-existing conditions should not be priced separately, and the deductible and payout ratio may be adjusted appropriately. The relevant product terms and rates shall indicate the applicable region and be verified through the product intelligent verification system.
In fact, in the past two years, many products have been adjusted in terms of compensation for people with pre-existing conditions and healthy people. For example, Beijing Universal Health Insurance has differentiated the compensation for different risk groups: the reimbursement ratio for people with non-pre-existing conditions is twice that of people with pre-existing conditions, and the deductible for hospitalization out-of-pocket insurance is also lower than that for people with pre-existing conditions.
In terms of business development, the Consultation Paper proposes that insurance companies can carry out customized medical insurance business in the form of co-insurance, and the head office should strengthen the management of branches participating in the co-insurance body to ensure that all internal control management requirements are in place. The co-insurance body must determine the sole main insurance company, which is responsible for issuing insurance policies to policyholders, accepting claim applications, providing claims services, and fulfilling the responsibility of reporting relevant information, and other insurance companies must cooperate with the main insurance company to carry out claims settlement services and fulfill the compensation obligations as agreed.
At the same time, the Consultation Paper requires that insurance companies should improve their political position, strengthen the operation and management of customized medical insurance business, conduct retrospective analysis every year, and adjust rates according to the deviation between the actual claims in the policy year and the expected claims in the protection plan, so as to promote sustainable operation and protection.
The number of insured people in some cities has declined
The Research Report on the Development Model of Huimin Insurance has generally disclosed the participation rate of "Huimin Insurance" in different cities. The report analyzes 86 products that have disclosed relevant data as examples, and the average participation rate of all products is 193%, of which 51 products have an insurance participation rate of less than 15%, and the product with the highest insurance rate is the 2022 version of "Zhejiang Libao", which has reached 921%。
Since its launch in 2020, the participation rate of "Zhejiang Libao" in Lishui City for three consecutive years has been3% and 935%；In terms of payouts, the loss ratio is 94% in the first year and 87% in the second year.
However, not all cities have such enrollment data. Shanghai, Shenzhen and other places with an advantage in the total population are facing the test of the number of insured people.
There has been a decline in the number of insured people in Shanghai. The 2023 "Shanghai Huibao" insurance window officially closed at 24:00 on July 31, 2023, and in two months, more than 6 million Shanghai citizens participated in the insurance, with a permanent population of 2,475 in Shanghai in 2022A rough calculation of 890,000 people shows that the participation rate is less than 30%. In 2021, the number of insured people in the 2021 version of Shanghai Huibao was 7.39 million, with an insurance participation rate of 38%; In 2022, the cumulative number of insured people is 6.53 million, with an insurance participation rate of 33%.
*From 39 yuan per person** to 88 yuan per person, a similar situation has occurred in the "Shenzhen Huimin Insurance". As of the end of the centralized insurance period on June 30, 2023, the total number of insured people in "Shenzhen Huimin Insurance" is 6.03 million (4.63 million for individuals and 1.4 million for groups), while in 2020, the number of insured people in "Shenzhen Huimin Insurance" has reached 7.8 million.
The 2024 "Beijing Universal Health Insurance", which will enter the centralized enrollment period from November 1, 2023, is in the stage of extending the enrollment period. After the protection has already taken effect on January 1, 2024, the 2024 "Beijing Universal Health Insurance" has been extended by one month, and the number of insured people is currently 3.53 million. The number of insured people in 2023 is 3.1 million.
Zhu Minglai, director of the Health Economics and Medical Security Research Center of Nankai University, the leader of the Huimin Insurance Development Model Research Report, believes that to the level of the insurance rate, the product can basically stand on its feet, and if the insurance rate is low to single digits, "Huimin Insurance" will be more difficult.