Govt working to raise MediShield coverage

21 Sep 2009, The Straits Times

Question

Name of the Person: Tan Kin Lian

Bring more under MediShield

I REFER to last Friday's joint reply by the Ministry of Health and the Central Provident Fund (CPF) Board, 'What MediShield coverage may exclude'.

When MediShield was introduced more than two decades ago, the Government decided to cover CPF contributors only and give members the right to opt out of the scheme.

Some members opted out as they were already covered by their employer or for other reasons. Many others were not covered under MediShield as they did not have a CPF account at that time - for example, if they were not working or were self-employed.

Today, there are many people who are not covered by MediShield. They are allowed to join MediShield, but are subject to underwriting. If they are not in good health, they may be rejected or have exclusions imposed on them.

As many years have passed since MediShield was launched, it is time to review the need for an underwriting requirement with MediShield. I suggest the following measures:

Have a window period to allow those not insured to join MediShield on special terms. They are not subject to underwriting, but will have existing illnesses excluded or partially covered for a period of two years. These illnesses will be fully covered after the two-year period. The excluded illnesses will be of a serious nature and will be defined clearly.

Identify the non-insured people, approach them and have an easy way for them to join MediShield. The people to be approached are those with a Medisave account, who are not covered under a MediShield plan.

Make it compulsory and automatic for all newborns to be covered under MediShield.

It is important to have every resident covered under MediShield so they will not be bankrupted by the high cost of major medical expenses.

As MediShield is a national scheme, it can be made easily available to all eligible people without the need for the meticulous underwriting measures that are adopted by commercial insurers. The risk of adverse selection and moral hazard is already reduced by the imposition of a deductible that has to be paid first by the insured.

We have read of the debate in the United States about reforming its health-care system and the need to offer coverage to more than 30 million uninsured people.

We have a similar problem in Singapore, although on a much smaller scale. We have to act early and offer coverage to our own uninsured people.

Reply

Reply from MOH 

WE AGREE with Mr Tan Kin Lian last Monday that we should 'Bring more under MediShield', and 'Fix this weak link in health insurance' as urged by the editorial last Friday.

Today, more than 84 per cent of the population is covered. We are working to raise this coverage further. We are confident of exceeding 90 per cent as an immediate target.

The vast majority of those currently uninsured belong to two groups: children and non-working spouses. Most are uninsured not because of pre-existing illnesses, but because of inertia. We are reaching out to them.

Since December 2007, all newborns are auto-covered under MediShield, unless their parents opt out. Under this initiative, 98 per cent of parents have chosen to insure their newborns. We are now catching up with the children in schools, to get them into MediShield. Separately, we are working with NTUC and the unions to remind workers to sign up for their spouses.

MediShield subjects applicants to underwriting to reduce adverse selection and ensure the long-term viability of the scheme. This keeps premiums affordable for existing members who enter the scheme in good health. Even then, MediShield rejections due to pre-existing illnesses are the exception rather than the norm.

There are two types of pre-existing illnesses: congenital illnesses and those acquired in later life. The right way to avoid rejections due to acquired pre-existing illnesses is to join MediShield early when young and healthy. Mr Tan's suggestion to fully cover members with pre-existing health conditions after a window period would have the opposite effect of encouraging people to delay subscription. This would not be in the interest of members.

As for those with congenital illnesses, we are sympathetic to their plight. We would like to get them insured but precisely because they are in the minority, the premiums will be high for such a risk group. One way to lower the premium significantly is for the majority of Singaporeans without congenital illnesses to cross-subsidise them through higher premiums across the board. This is done in some countries and we are studying their experience. But such an approach will require the support of Singaporeans.

Meanwhile, we will continue to look after those with congenital illnesses via government subsidies and Medifund. They will have access to affordable health care even without MediShield coverage.