Conversation with Zhong An Health Insurance Product Manager Wang Shun: Finding the Boundary of the "Impossible Triangle" for Coverage of People with Pre-existing Conditions

Domestic commercial health insurance is entering a critically important deep-water phase.

According to the latest industry statistics, the number of people with pre-existing conditions and sub-health status in China has exceeded 400 million, with the vast majority being chronic disease patients.

As the aging population continues to grow, the actual medical payment needs of this large group are experiencing exponential increases.

However, the reality has long been that these 400 million people are often excluded by mainstream commercial health insurance due to strict health declaration thresholds, which act as a ruthless filter.

Over the past decade, leveraging the demographic dividend of young, healthy populations, critical illness and million medical insurance products experienced explosive growth. But today, the penetration rate among healthy people is near the ceiling, premium growth has slowed, and the market has entered a highly competitive, stock-based game stage.

As finding new growth points becomes a mandatory challenge for all insurers, the pre-existing condition group—once seen as “high risk and difficult to price”—has naturally moved to the center stage.

This shift is driven not only by market self-discovery but also by clear policy guidance from the top: the 2026 government work report explicitly calls for “accelerating the development of commercial health insurance,” and at the previous Central Financial Work Conference, “inclusive finance” was officially included among the five major initiatives for the financial industry.

Meanwhile, the fundamental restructuring of the medical payment environment has further accelerated the transformation of commercial health insurance.

In recent years, reforms in medical payment methods have deepened, with DRG (Diagnosis-Related Groups) and DIP (Diagnosis-Intervention Packet) payment models being fully implemented across public hospitals nationwide. Under cost-control constraints, hospitals tend to discharge patients early once clinical cure indicators are met, to control average costs for specific diseases.

This change in payment mechanisms reshapes patient pathways, with many post-operative and stable critical illness patients facing pressure to move from public hospitals to outpatient rehab centers or home care.

All these factors provide clear entry points for commercial health insurance to intervene in full-course management and fill payment gaps, making coverage for pre-existing conditions a core policy and market issue.

However, in practice, promoting insurance for pre-existing conditions is no easy feat.

In recent years, some specialized insurance products targeting specific chronic diseases or relaxing underwriting conditions have emerged, and various “benefit for all” policies have significantly lowered entry barriers.

But from actual operational results, most products remain at a superficial “can insure” level, with high deductibles and strict claims conditions still creating a substantial gap from what patients truly need—“good claims.”

Against this backdrop, on March 12, ZhongAn Insurance officially launched “ZhongMinBao·Mid-to-High-End Medical Insurance 2026,” which for the first time includes inpatient rehabilitation costs for 16 specific diseases, offering zero deductible and direct payment support within partner hospital networks.

This upgraded product directly addresses three high-frequency pain points for pre-existing condition patients in real medical scenarios: small inpatient expenses, post-surgery recovery, and chronic disease medication.

From the publicly available coverage terms, ZhongAn aims to fill current market gaps and make a substantial shift from simple financial reimbursement to refined medical services.

This deep-water commercial exploration offers a practical model for the entire health insurance industry.

By examining the actuarial logic behind product iteration, the first attempt at HMO (Health Maintenance Organization) models in rehabilitation medicine, and the future evolution of commercial health insurance, Wall Street Journal China has engaged in a dialogue with Wang Shun, head of health insurance products at ZhongAn.

Actuarial Logic: Finding the Balance in the “Impossible Triangle”

Wall Street Journal China: ZhongMinBao’s mid-to-high-end medical insurance emphasizes no occupational restrictions and coverage for pre-existing conditions, but traditional health insurance pricing often considers the “impossible triangle” of “broad coverage, high protection, low premiums” as difficult to achieve simultaneously.

When upgrading to the 2026 version, how does the underlying actuarial logic and data model balance this contradiction?

Wang Shun: Currently, the biggest challenge in handling pre-existing condition groups in commercial medical insurance is the lack of long-term, large-scale, reliable experience data. Traditional actuarial models rely on static morbidity tables based on healthy populations. Directly applying these to pre-existing condition groups can lead to huge claim deviations.

The “impossible triangle” is a pre-set static model in actuarial science, but insurance products require a process of continuous exploration, validation, and refinement based on real-world operation with a large user base.

Over the past three years, ZhongMinBao has accumulated a vast and solid claims experience dataset.

Analysis of these real medical behaviors shows some results consistent with product design expectations, but also reveals long-tail risks and adverse selection biases beyond expectations. The essence of mutual aid in insurance is that if short-term arbitrage behaviors are allowed to develop, it will ultimately harm the long-term interests of the majority of customers.

Therefore, the iteration of ZhongMinBao mid-to-high-end 2026 has not blindly pursued scale expansion but adopted a more restrained and refined actuarial strategy.

The upgrade not only expands coverage of advantages but also introduces targeted risk prevention clauses. Through such precise adjustments, the product’s rate fairness and sustainability are ensured, providing long-term customers with a stable, cycle-proof protection system.

Wall Street Journal China: What specific risk control details are reflected in these “constraint adjustments”?

Wang Shun: For example, we have excluded high-risk conditions such as nodules of level 4 and above, lung nodules larger than 8mm;

We extended waiting periods for common pre-existing conditions, and for elective surgeries like stones, polyps, benign tumors, the first-year payout ratio for new policyholders has been lowered.

Wall Street Journal China: What is the reason or basis for making these “reductions”?

Wang Shun: When we find that the original design is not in the best interest of the majority of customers, we revise it during iteration.

Clinical data shows that lung nodules have a high probability of transforming into malignant tumors and incurring high surgical costs in the short term. Covering them would cause severe adverse selection, increasing overall underwriting costs.

Extending waiting periods for common pre-existing conditions is also based on real claims data, which shows many users insured with pre-existing conditions during very short waiting periods then immediately undergo non-emergency surgeries like gallbladder removal or polyp excision.

After removing these outliers, we have redistributed the saved claims resources to loyal customers seeking long-term health protection.

Wall Street Journal China: Please also elaborate on the “additions” in this new product, such as upgrades and innovations in high-frequency medical scenarios.

Wang Shun: We have increased the payout ratio for general medical expenses (non-critical illness) in the 0-20,000 yuan range from 50% to 60%.

In previous million medical insurance products, due to high deductibles of 10,000 yuan or more, many small inpatient expenses could not be reimbursed. Increasing the payout ratio in the low-deductible range directly and significantly boosts actual claims paid to patients.

Another major financial burden for pre-existing condition groups is chronic disease medication.

ZhongMinBao mid-to-high-end 2026 upgrades the responsibility for original imported drugs for chronic diseases to a mandatory benefit, providing an annual quota of 5,000 yuan, with a 60% payout ratio and support for zero deductible.

We benchmarked drug prices on mainstream e-commerce platforms, combined online consultation and home delivery services, substantially lowering the barrier for patients to access high-cost, high-quality original drugs.

Rehabilitation Breakthrough: Rebuilding the DRG Model and the Cost-Control Loop of HMO

Wall Street Journal China: The most groundbreaking aspect of this product upgrade is the inclusion of rehabilitation in the high-coverage system, with certain diseases reimbursed at 100%.

In the past, rehabilitation services have been a “forbidden zone” for commercial medical insurance due to the difficulty of controlling costs. Including high-cost rehab stages challenges insurers’ cost management.

As the product lead, how do you view the insurer’s role in the full medical rehabilitation process?

Wang Shun: Adding rehabilitation coverage is a direct response to the ongoing reform of the medical payment system.

By 2026, DRG (Diagnosis-Related Groups) payment reform has been fully implemented in public hospitals nationwide. Under the current DRG mechanism, hospitals tend to discharge patients early once clinical cure criteria are met to control average costs for specific diseases.

But this does not mean treatment ends there.

For example, in stroke patients, the six months after the acute phase is the golden period for neurological recovery. Deep, professional rehabilitation intervention is crucial for future quality of life.

Historically, commercial health insurance has rarely covered rehabilitation because these services are highly non-standardized, lacking strict management norms and clear stopping points.

We are not opting for broad, unstructured coverage but are precisely selecting specific critical illnesses like stroke and cancer, which have clear clinical pathways and strong rehabilitation needs, offering coverage up to 1 million yuan with up to 100% reimbursement.

Wall Street Journal China: How does ZhongAn ensure service delivery when integrating external medical institutions?

Wang Shun: In terms of implementation, we are exploring a deep cooperation model similar to HMO.

We have selected 33 core hospitals under two leading rehabilitation medical groups across the country for direct point-to-point connection. Unlike traditional health insurance that only offers post-treatment reimbursement with no intervention during treatment, we intervene early before admission.

By collaborating with professional rehabilitation teams, insurers participate in developing standardized, integrated rehab plans, monitoring and comparing costs during diagnosis, medication, and physical therapy.

This deep involvement greatly enhances the insurer’s control over medical processes and costs. The service loop benefits patients directly: within these connected rehab hospitals, patients can enjoy direct billing at discharge without large upfront payments, making recovery smoother.

Industry Outlook: From Payment Tool to Medical Service Gateway

Wall Street Journal China: We notice this product features a special medical care package with a 3 million yuan coverage and a 20,000 yuan deductible, with some diseases reimbursed at 50%.

Can you explain how the zero-deductible coverage and the 20,000 yuan deductible for the special care package work together in claims?

Wang Shun: The design logic of the special care package is to provide consumers with multiple levels of medical choice. The cost of private hospital specialty departments is often several times higher than standard departments and generally not covered by insurance.

In the product structure: if a customer suffers a critical illness, the main policy offers zero deductible access to specialty departments, ensuring top-tier medical resources for severe cases.

For ordinary illnesses, if the customer uses the care package to access specialty departments, they pay a 20,000 yuan deductible, with expenses above that fully reimbursed at 100%. If they do not go to the specialty department, they enjoy the main policy’s coverage of 0-20,000 yuan at 60%, and above 20,000 yuan at 100%.

This tiered approach balances high-end, differentiated medical needs with risk control against moral hazard from mild cases overusing premium resources.

Wall Street Journal China: How do you view the evolution and future of commercial health insurance?

Wang Shun: Overall, shifting from a passive financial payer to an active gateway for medical services is an irreversible trend in China’s commercial health insurance.

With aging populations and normalized medical cost controls, the core value of health insurance is no longer just probabilistic betting on actuarial tables but serving as a solid link—using financial payment mechanisms to connect patients efficiently with high-quality, curated medical resources.

While the industry broadly agrees on this direction, insurers are still exploring viable paths and profitable business models within the current healthcare system.

In the future, ZhongAn will continue leveraging its large base for data accumulation, agile iteration, and gradually building an integrated health service loop—from hospital treatment to outpatient rehab, from specialized care to chronic disease medication.

Only by deeply engaging with the healthcare industry can commercial health insurance find new growth points in the stock era.

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