Draft model clauses are emerging as key reference texts aimed at standardizing the language and structure of commercial health insurance contracts. On September 17, it was reported that the China Insurance Association, following in-depth research and broad public consultation, has for the first time prepared draft model clauses for general short-term commercial medical insurance, general long-term commercial medical insurance, and city-customized commercial medical insurance.
The draft for general short-term medical insurance contains 51 articles and 24 definitions. Meanwhile, the draft for general long-term medical insurance includes 59 articles and 24 definitions. The city-customized commercial medical insurance draft is comprised of 36 articles and 17 definitions. These drafts are designed to serve as standardized templates for the industry.
Key provisions in the model clauses clarify the components of insurance contracts, the scope of coverage, benefit payments, premium payments, contract modifications, and the duty of clear explanation and honest disclosure. Furthermore, they unify the interpretation of 24 commonly used concepts, including "first-time insurance application," "reasonable and necessary," "initial diagnosis occurrence," and "specialist physician."
For short-term health plans, the clauses mandate clear disclosure that coverage is not guaranteed for renewal. For long-term medical insurance with adjustable premiums, they specify the triggers for premium adjustment, timing, caps, the process involved, and information disclosure requirements. The drafts center on the core function of medical expense reimbursement, detailing coverage for inpatient costs, outpatient and emergency care, specific medication expenses, and proton and heavy ion therapy, along with payment standards. They also establish clear guidelines for waiting periods, deductibles, benefit limits, the types of designated medical institutions, and the structure of benefit schedules.
Addressing common consumer pain points, the model clauses aim to standardize exclusion provisions by requiring prominent labeling to draw attention to them. Insurers are encouraged to reduce exclusion events. Additionally, the clauses standardize claim application materials and service timelines to improve efficiency, clarify how deductibles are applied, and encourage coverage flexibility for sudden critical or emergency illnesses even when treated outside the predefined network of medical institutions. The benefit schedule is designated as a vital component of the contract, using standardized tables to visually display core coverage information, thereby strengthening consumer protection.
Regarding specific medication benefits, the model clauses stipulate that the drug lists agreed upon by insurers must encompass the commercial health insurance drug coverage list published by the insurance association. This approach reserves room for the implementation and dynamic adjustment of the drug list, aiming to better satisfy public medication needs, foster synergy among insurance, healthcare, and pharmaceutical sectors, and support the development of innovative biomedical industries.
Commercial health insurance in China has grown rapidly in recent years, with expanding coverage and an increasingly prominent role in the multi-tiered medical security system. The development of standardized exclusion clauses is intended to regulate insurance practices and protect the rights of all parties involved. Lin Xianping, an associate professor at Zhejiang University City College, believes that once the model clauses are formally introduced, they will help drive medical insurance toward greater standardization and transparency. Products with complicated exclusions, confusing deductible logic, unclear drug benefit details, and inconsistent claim standards are likely to diminish, compelling the industry to move away from relying on complex text-based rules.
"If insurers adopt these model clauses, it will reduce the risk of misunderstandings caused by ambiguous language for consumers," Lin said. "Coverage scope, claim rules, and exclusion boundaries will become clear and predictable, reducing disputes arising from vague regulations and effectively protecting policyholders' right to know and their legitimate interests. At the same time, standardizing exclusions and consolidating drug lists will address the chaos of hidden exclusions and arbitrary reductions in pharmaceutical coverage, thereby substantially enhancing the protection and certainty of medical insurance," Lin continued.
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