Databao Partners with Guohua Life to Launch 'Databao Health Insurance', Driving the Transformation from Premium to Inclusive Healthcare

On May 11, 2016, Datbao, an online platform for personal health insurance, officially launched the “Datbao Medical Insurance” universal healthcare coverage plan, which provides reimbursement for both outpatient and inpatient expenses incurred outside the scope of the social security catalog. In contrast to high-end medical insurance products that cover only a small segment of the population, “Datbao Medical Insurance” is positioned to provide coverage for a broader middle-class demographic, filling the gap between basic social security and high-end medical insurance, thereby facilitating the transition of high-end medical services toward more inclusive healthcare.

Da Te Bao focuses on health insurance. After completing its Series B financing round this February, the company reached a valuation of RMB 1 billion. It will prioritize the development of internet-based medical insurance to provide coverage for individuals with pre-existing conditions.

Due to the high risk of adverse selection and the difficulty in controlling medical costs, pure protection-type outpatient or inpatient insurance policies are generally expensive. Insurers are often reluctant to offer them as standalone products, instead bundling supplementary medical insurance as riders to investment-linked or participating life insurance policies, which results in significantly inadequate coverage. Zhou Lei, CEO of Datebao, believes that “mid-tier medical insurance” tailored for middle-class individuals and families, along with proactive online-to-offline (O2O) medical services and health management services, represents a true blue ocean market. However, insurers’ current operational systems struggle to deliver these offerings effectively, necessitating collaboration with third-party platforms.

Mid-Tier Medical Insurance Faces Huge Demand, Could Become the Next Breakout Point

While social insurance offers broad coverage, it suffers from limited benefits. Even with a social security card, residents still incur substantial out-of-pocket expenses for each medical visit, as many self-pay medications are excluded from reimbursement. Moreover, not all hospital wards are covered under the social insurance scheme; patients seeking a more private recovery environment must bear the costs themselves. For individuals without social insurance, all medical expenses are paid out of pocket. Additionally, among those who are insured but have high geographic mobility, out-of-pocket payments are more frequent throughout the year due to regional restrictions on social insurance reimbursement.

The National Health and Family Planning Commission’s annual statistical bulletin indicates that China’s total health expenditure in 2014 was projected to reach RMB 3.53789 trillion, of which individual out-of-pocket spending amounted to RMB 1.17453 trillion, accounting for 33.2%. Per capita health expenditure stood at RMB 2,586.5, marking consecutive years of growth and outpacing GDP growth, while per capita hospitalization costs were RMB 7,832.3. Additionally, data on medical visit expenditures from a research firm in 2015 showed that individuals bore more than 20% of hospitalization costs; the reimbursement rate for expenses within the social insurance catalog was only 48%, with the remaining 52% of medical costs borne by employees themselves.

A significant number of middle-class individuals face substantial and diverse demands for commercial medical insurance. However, in China, the mid-tier medical insurance market has long remained vacant, while high-end medical insurance covers only a small segment of the affluent population. Although it offers comprehensive coverage, its premiums are equally high, with annual costs ranging from tens of thousands to hundreds of thousands of yuan—far exceeding the purchasing power of the average middle-class household.

Major Critical Illness Insurance Supplements Social Security Shortfalls, with a Hospitalization Coverage Limit of 500,000 Yuan

In light of the above, Da Te Bao has partnered with Guohua Life Insurance to jointly launch the Da Te Yi Bao Universal Medical Protection Plan. This plan provides reimbursement for outpatient and inpatient expenses incurred due to accidents or illnesses, breaking through geographical and pharmaceutical restrictions with nationwide coverage. Outpatient and emergency services are optional. Individuals aged 28 days to 60 years are eligible for enrollment (with renewal available up to age 80), making it suitable for various family members. The covered medical institutions include public hospitals classified as Tier II or above by the National Health Commission of China.

In terms of coverage limits, the sum insured for general outpatient and emergency care is RMB 1,000 with no deductible, meeting the high-frequency medical needs for common minor illnesses. The reimbursement scope covers consultation fees, examination and test fees, treatment fees, outpatient surgical fees, medication costs, physical therapy fees, and more. For inpatient medical care, there are two sum-insured options: RMB 200,000 and RMB 500,000. These plans help patients cover treatment and hospitalization costs for critical illnesses, including pre- and post-hospitalization outpatient and emergency visits as well as specific outpatient services. The reimbursement scope includes medication costs, inpatient surgical fees, bed and meal charges, and other expenses. The daily limit for bed and meal charges is RMB 2,000, which is higher than the daily limits for similar coverage items in the market.

In terms of pricing, premiums vary by age group: inpatient medical coverage with a sum insured of RMB 200,000 starts at RMB 183, while coverage with a sum insured of RMB 500,000 starts at RMB 206. Even when outpatient services are included, the maximum premium remains under RMB 2,000. This offers a clear advantage over high-end medical insurance, as the coverage amounts adequately meet the healthcare needs of the majority. Furthermore, Datebao has introduced an interest-free installment payment option for premiums, allowing users to alleviate their financial burden through phased payments.

Compensation credited within 1 hour; red packet rewards available for exercise

Price and service are key to health insurance. Da Te Bao not only makes its pricing accessible to the general public but also achieves significant breakthroughs in claims processing and customer service. For claims of RMB 500 or less, reimbursement is completed within one hour. To address the widespread issues of long waiting times and difficulty in accessing medical care, Da Te Bao Health Insurance provides telephone consultation and online health information services, allowing users to consult with physicians from top-tier (Grade A Tertiary) hospitals in Beijing and Shanghai, thereby resolving certain health concerns before visiting a hospital.

Furthermore, the Da Te Medical Insurance includes a fitness incentive program. After purchasing the policy, users can download the “Da Te Bao” app and earn rewards by achieving a daily step target, with maximum rewards equivalent to the full premium amount. By intervening in user behavior to facilitate health management, this approach not only reduces users’ risk of disease but also effectively lowers the insurer’s claim ratio, thereby helping users reduce their premiums.